Silver is on the decline again with the price now trading around $22.50 an ounce.
While the recent move is more a slight pullback after last week’s haven demand-induced surge rather than a significant change in direction for silver, it is also symptomatic of silver’s performance over the last 18 months.
Despite the fundamental outlook for silver pointing to a commodity that is priced well below its fair value, with demand outstripping supply and set to for a few years yet, any attempts for the price to climb are swiftly met with a countering bearish outlook to stymie any sustained rally.
Today’s reminder from the Federal Reserve of how high interest rates have climbed and the reality that they are set to stay that way for the foreseeable future is likely to have a bearish impact on silver with the physical metal’s lack of yield making it less attractive at times of high and/or rising interest rates.
As such there appears little likelihood of silver challenging the highs of this year and the year before above $26 an ounce with the price instead likely to drift around its current levels with all eyes trained on developments in Israel and Gaza.
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.
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