Silver is just about holding above $19 an ounce as it continues to test levels last seen two years ago.
While today’s losses are comparatively small versus what the precious metal has suffered in recent months, it is still on course for yet another weekly loss with the price having lost more than $7 since its March high.
The latest source of pain is comment from two hawkish members of the Federal Reserve’s rate-setting committee that back another 75 basis point interest rate rise when they meet later this month. This has the dual impact of strengthening the US dollar, which pulls down the commodities priced in that currency including silver, as well as making non-yield bearing assets less attractive, such as physical silver.
Live Silver Price – $/oz
During silver’s multi-month slide, any attempt to suggest supportive levels at which the price might rally from having proven fruitless. For the time being silver is so out of favour among investors that it looks best to sit on the sidelines until sentiment changes.
With further hikes expected by central banks, especially the Fed, over the course of the year, that rallying point may still be some way off but when it finally arrives, silver’s scope for gains could be spectacular as the fundamental case for the metal-based on supply and demand remains strong.
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