After the sharp price gains of recent weeks, silver is currently trading sideways around $25.50 an ounce as the markets await today’s release of the latest US inflation data.
Silver has enjoyed a strong couple of months first on the precious metal’s haven appeal during the US banking crisis and then further supported by the expectation that the Federal Reserve’s hiking cycle has come to an end. Having briefly topped $26 an ounce earlier this month, the question investors are asking is whether silver has sufficient bullish factors to drive it upwards once again and first challenge last year’s high and even push on up towards $30 an ounce.
Assuming today’s CPI release confirms that inflation is starting to return to more comfortable levels, this should help to start rebuilding confidence in an equities market that has endured a difficult 2023 so far. This, in turn, should be supportive for silver as even though it can be considered a hedge against inflation, and therefore find support during times of high inflation, the reality is that the Fed’s hawkish approach to curbing runaway consumer prices spectacularly offset any of those potential benefits.
With inflation moving in the right direction, the Fed easing off on hikes, and silver still in strong demand from industries such as solar and electric vehicles, the obstacles are starting to clear from silver’s path and open up the possibility of a renewed climb towards levels seldom touched in the precious metal’s long trading history.
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. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
