Silver is holding above the crucial threshold of $20 an ounce, underlying the metal is creeping back in favour among investors after spectacularly losing support over the previous three months.
Strong jobs data can be interpreted in two contrasting ways for silver. The metal’s use in a range of industries, including in electric vehicles, mean that signs of a strong US economy are positive for silver demand.
Equally, the robustness of the US economy gives the Federal Reserve greater confidence to implement the series of interest rate hikes it is planning, which would be a negative for silver as rising interest rates reduce the investor appeal of the non-yield-bearing metal.
The fact that silver remains above $20 despite the increasing likelihood of upcoming large interest rate hikes by the Fed points to the slight shift in the narrative surrounding the metal. With the bottom reached in July, the fundamental outlook which has this year being a record year demand-wise has been allowed to reenter investors’ thoughts.
How much ground silver can recover is likely to be capped by the aggression of the Fed but investors will be anticipating that silver can continue to trade in the $20s with this slightly more optimistic medium-term outlook.
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.
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