Silver has remained below $25 an ounce in the face of hawkish comments from Federal Reserve Chair Jerome Powell about the pace and strength of the US central bank’s implementation of measures to try and bring inflation under control.
With interest rate rises of 50 basis points now almost certain in May and June with another similar hike increasingly likely in July too, non-yield bearing assets such as silver look less attractive in the medium-term.
Live Silver Price Chart – $/oz
For much of this year, silver has found considerable underlying support each time it has dipped below $25 an ounce but on this occasion, the strength of the market reaction to Powell’s comments has diminished silver’s appeal.
But it isn’t all doom and gloom for silver as the reason the Fed is having to be so aggressive with its policy is the concern of rising inflation, and silver is typically considered a good hedge against inflation as an asset that has held its value over time.
Furthermore, in contrast to gold, silver has a strong industrial demand underpinning it and the outlook for this year looks bullish in this regard and could see the price push upward once again soon.
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