Silver is still just about holding above $20 an ounce despite a negative price performance so far this week.
For a metal that is often prone to bouts of volatility, silver’s price has traded in a very narrow range just above $20 an ounce so far in August. This underlines the strength of support that silver has now built up around this threshold as well as reflecting the fact the macroeconomic picture hasn’t dramatically changed in recent weeks.
Inflation remains a concern, as shown by today’s high figure out of the UK, with central banks likely to continue implementing a series of interest rate hikes to curb rising prices. Equally, the juggling act central bankers face in curbing inflation while not tipping an economy into recession was evidenced earlier in the week with China’s surprise rate cut following a slowdown in the country’s economy.
Insight into how the US is seeking to balance these dual concerns will be available later today with the release of the minutes of the Federal Open Market Committee’s latest meeting. Silver investors will be hoping these minutes point to fewer interest rate rises now needed in the US with the metal very reactive to the actions of the Fed with silver’s multi-month price plunge from April to July triggered by the change to a hawkish approach by the US central bank.
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