Posted 6th May 2022

Silver’s Slide Continues as Price Nears $22 Despite Strong Fundamental Case

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Silver’s slide shows no sign of stalling with the price of the precious metal now barely above $22 an ounce, having been trading comfortably above $25 an ounce barely a fortnight ago. 

Confirmation of the Federal Reserve implementing its biggest rate hike since 2000 as well as hawkish rhetoric and rate increases by other central banks in Europe has made silver a less attractive asset versus other haven assets such as bonds, whose returns will increase in line with central bank rate hikes. 

Live Silver Price – $/oz

With a large portion of fear trading over the war in Ukraine having been unwound and with the Fed, the Bank of England and shortly the European Central Bank all set to raise interest rates in coming months, it is hard to see the short-term factor that will finally provide support to silver.

That said, the fundamental case for silver remains strong with demand for the metal in industrial applications such as technology and photovoltaics remains strong following on from a record year in 2021. As such, silver now seems massively undervalued and these low prices present an opportunity for a brave investor to bolster their silver holdings. 

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