Posted 28th March 2022

Silver Drops Back to $25 But Underlying Support Should See It Gain Again Shortly

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Silver, like gold, has been pulled down by a slight increase in risk appetite following words from Ukrainian President Volodymyr Zelensky that he is willing to consider neutral status for Ukraine in upcoming talks with his Russian counterparts. 

Hope that peace can be achieved in the coming weeks has seen equities gain and haven assets such as silver decline. Added to that, a stronger dollar has also added pressure to dollar-priced assets with silver now trading just above $25 an ounce. 

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Silver ($/oz) chart – 15-minutes – from Kinesis Exchange

It will be interesting to see silver’s reaction if it does fall through the $25 threshold as on the three previous occasions it has dipped below recently, the price has quickly rebounded back above $25.

Fundamentally, the outlook for silver remains encouraging with industrial demand set to be strong, particularly for photovoltaic cells, while rising inflation is another source of strength with silver considered a hedge against rising prices. 

These bullish factors outweigh the headwinds provided by rising interest rates and a slight reduction in fear trading and should see silver climb again soon.

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