Silver is enduring another of its phases where it falls out of favour among investors and now needs a significant spark to reignite its popularity.
Even the prospect of the US defaulting on its debt, which is getting ever more real the longer talks fail to reach agreement, has failed to boost silver, which is often considered a safe haven asset in part due to its lack of counterparty risk.
One factor that will be holding back silver’s attempts to stall its slide, which has now seen the price head towards $23 an ounce, is a slight reappraisal on how certain the Federal Reserve is to have stopped its series of interest rate hikes. Given that this was the single biggest headwind for silver in the last year or so, any more hikes will reduce its appeal further.
For the time being, silver’s persistently strong fundamental case, with the metal set for another supply deficit this year, is not getting a look in. Yet while it may be out of favour currently, the long-term prospects for silver remain bullish so the downward trend is unlikely to last long and support will soon come in should the price fall below $23 an ounce.
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.
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.
