Posted 8th June 2022

Silver Investors Take Stock With Metal Stabilising Near $22 Yet Asset Remains Cheap

silver bar bullion

Silver looks to have found its level for the time being at around $22 an ounce. 

Holders of silver have had a volatile few months with bullish runs up to well above $26 an ounce followed by a multi-week plunge that saw the price sink below $21 an ounce. Yet after all that volatility, the price is now almost back to where it started the year and seemingly in a period of calm. 

Live Silver Price – $/oz

Silver typically is more volatile than gold due to the lower volumes that trade the precious metal yet even given this context, the price shocks silver has endured this year have seemed out of sync with the geopolitical and macroeconomic data driving the moves.

This new-found value of around $22 an ounce reflects that the main drivers of the year, first the war in Ukraine and then the series of central bank interest rate hikes to tackle runaway inflation are now effectively priced in. 

While this relative calmness may be welcomed by some, the fundamental outlook points to further gains still for silver. The energy transition will require vast amounts of silver as we shift from fossil fuels to renewable energy, notably solar. Equally the switch to electric vehicles provides another boost for silver demand with the metal used in multiple elements of the drivetrain. 

As such, $22 an ounce still seems too cheap for this in-demand asset.

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. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.