Silver Near Three-Month Lows as Markets Await Fed’s Rate Hike, Powell Comments

Silver finds itself well below $23 an ounce at levels not seen for almost three months as investors punish non-yield bearing assets such as precious metals in an environment where central banks in the US and Europe are expected to implement a series of interest rate hikes over the course of the year.

Today is expected to bring confirmation of the Federal Reserve’s largest rate hike since 2000 with the Bank of England likely to raise its benchmark rate to the highest in 13 years tomorrow.

But while these moves are fairly well priced in with investors having already meted out their punishment to silver over the last couple of weeks, where the metal goes to from where will be determined by the comments of Fed Chair Jerome Powell that will follow the committee’s rate decision. 

Live Silver Price – $/oz

Investors are anticipating hikes in May, June and July so any indication that deviates from this will be pounced upon while Powell’s comments about the pace of the tightening of the Fed’s balance sheet will also be pored over.

This hawkish environment has put silver under considerable pressure so any indication that the future pace may not be as fast or as severe will provide breathing space. 

Indeed from a technical perspective silver is in oversold territory and with the fundamental case for the metal remaining strong, the likelihood of a fast rebound can’t be ruled out. Certainly, the medium-term outlook for silver looks healthier than that for gold. 

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 greenwashing while investing sustainably.

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