Silver continues to trade in the mid to high $23 an ounce region with the price going through a period of sideways movement while investors assess how bullish to be on this in-demand metal.
The strong fundamental case for silver is clear for all to see with the metal needed in both the energy transition and the tech revolution. However, silver isn’t driven solely by its supply and demand fundamentals, as shown by last year’s price plunge after the Federal Reserve started to implement a series of interest rate hikes.
It is interesting to note that while gold has made a series of significant gains already this year, silver is largely treading water even though the fundamental case for silver is far stronger. The lifting of restrictions in China, the prospect of the Fed soon ending its rate hikes as well as a weakening of the US dollar are all supportive factors for silver, as are gold’s gains given the correlation between the two precious metals.
Yet after a stellar run from mid-October through to the end of 2022, investors seem reluctant so far to keep backing silver so strongly. The price remains more than $2 an ounce off its 2022 high with a fundamental case that is stronger than when it achieved those levels in March, so this consolidation period represents a potential buying opportunity, particularly considering the gold/silver ratio has now pushed up to close to 80.
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.