Silver is just about holding above $21 an ounce as markets prepare for a busy week on the macroeconomic front, with Federal Chair Jerome Powell’s testimony as well as employment data out of the US.
Silver has found itself struggling since traders and investors repriced how soon the Fed will pause its current policy of hiking interest rates so Powell’s comments on both Tuesday and Wednesday are likely to have a significant impact on determining silver’s direction. Holders of the metal will be hoping that the Fed Chair’s outlook doesn’t infer that interest rates need to climb higher than the 5% figure that is now the current expectation.
Silver has had a curious 2023 so far, having entered the new year with expectations that the stellar recovery on display in the final quarter of 2022 would continue. But rather than continue climbing, the price first tread water in January before slumping in February. The early signs are that March may be a month of consolidation with lots of key data and decisions taking place that will set the scene for what will follow in the coming months and quarters.
Once markets move beyond the current focus on how much higher the Fed and other central banks will keep hiking rates for, silver will have the chance to climb higher with its current price way below where its fundamental outlook in which healthy demand is outpacing supply suggests it should be.
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