Silver has sunk back below $23 an ounce with the uptick that initially kicked off the week proving fleeting.
Silver is still having to battle against a strong US dollar and high-interest rates, both of which are bearish factors for the precious metal. With no immediate likelihood of the greenback suddenly weakening and with interest rates set to remain at their current levels for the next few months, the macroeconomic environment is likely to remain challenging for silver for a while yet.
Today’s move downward is more likely linked to gold’s own drop below $1,900 an ounce than any fresh sell-off specific to silver. Indeed if silver was solely priced on the fundamental supply and demand balance, the metal would be trading significantly higher as mining operations are failing to keep up with industrial demand for this highly conductive element.
This push and pull on silver where a strong fundamental case has been more than offset the bearish macroeconomic environment has been going on for the last year or so and is likely to remain that way. As such, while silver still has the potential to climb sharply higher, investors hoping for a rally have had numerous false dawns with any change to this narrative unlikely.
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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