In contrast to its precious metal peer gold, silver is struggling to gain much traction having dropped about $2 an ounce from the high touched earlier in the month.
The prospect of the Federal Reserve pausing on any more interest rate hikes should be supportive for silver, as this has been the single biggest headwind for the metal’s price in the last year. However, silver’s greater industrial exposure compared with gold has seen it affected by concerns over the health of the global economy.
Some of these fears look overblown, particularly considering silver draws much of its industrial demand from two industries that look well set to thrive irrespective of the short-term economic situation. The urgent need for the world to move away from fossil fuel-based energy sources in favour of renewable ones will keep demand for solar energy and electric vehicles very healthy for decades with both sectors using silver in their manufacture, thanks to the metal’s excellent conductive qualities.
As a result, the short-term hit to silver’s price that has seen it drop back to $24 an ounce should present another buying opportunity for an investor focused more on the medium to long-term case for silver.
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.