Silver’s slide continues following the latest round of comments from senior Federal Reserve officials that reiterated the US central bank’s commitment to continuing to increase interest rates to calm inflation.
While gold, silver’s precious metal peer, is at levels last seen 2 and half years ago, silver is still comfortably above the low for the year touched at the end of August. This reflects the contrasting situation silver finds itself in with the punishment meted out to the metal earlier in the year leaving very little downside room for it.
As such even though the prospect of further rate hikes by the Fed and other central banks across the world remains a bearish driver for silver, there is only so far the price can dip before buying interest steps in to take advantage of an asset that looks heavily undervalued given its bullish long-term fundamental outlook given the metal’s key role in the energy transition.
As such, while the metal may continue to drift lower in the short-term, any dip below $18 an ounce is likely to spark buying activity to see it quickly regain that threshold.
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