Silver has, like gold, dipped from its recent highs and is now trading below $25 an ounce following a slight reappraisal of prices following comments from Federal Reserve officials that reiterated the need for more interest hikes to fully tame inflation.
After silver’s impressive surge that saw it gain more than $5 an ounce from early March, a slight pullback was to be expected yet the fundamental outlook suggests fresh gains are still possible. The metal remains in strong demand from the solar sector as well as electric vehicles and these are likely to form a bedrock of support for many years yet.
The main headwind for silver in the last year has been the prospect and implementation of interest rate hikes by the Fed, with interest-bearing assets being favoured at times of rising interest rates. It is worth mentioning that Kinesis’ silver KAG product solves that issue with its silver-backed currency paying a monthly dividend to its holders.
So while we haven’t yet reached the end of the hiking cycle, the talk is now how many more are left rather than whether it will end. As such, while the price may dip in the short-term, silver’s medium to long-term prospects look healthy and the price can soon challenge last year’s high above $26 an ounce and potentially push on towards $30.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
