Silver is experiencing a slight dip today having climbed comfortably above $21 an ounce as investors sought out its haven qualities on the back of the collapse of three US banks.
After silver was initially slow to respond to this increased haven demand, the precious metal has enjoyed a considerable upsurge with the price gaining almost $2 an ounce before slipping back slightly.
Next week’s Federal Reserve interest rate decision will have crucial importance in determining silver’s direction in the short to medium term. The sentiment is once again returning to the Fed implementing a 25 basis point hike after the initial collapses of Silvergate, Silicon Valley and Signature led to some expecting the US central bank to hold off on any further increases.
If rates do continue to rise then silver’s scope for further gains will be capped, despite the strong fundamental case for the metal. However, if the Fed is unexpectedly dovish and does keep rates where they are then silver could make considerable gains with demand for the metal outstripping supply and yet still trading at levels considerably lower than where it started the year.
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