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.
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