Silver is struggling to make any headway with the price trading around $21.50 an ounce.
After the painful run of losses from mid-April to mid-May that saw the price fall by more than $5, the brief attempt to recover some of those losses was stopped in its tracks by the Federal Reserve’s 75 basis points move last week.
Silver can draw on multiple factors to drive its price but unfortunately, none of those are looking particularly compelling in the short term. Its perceived role of being a hedge against inflation is failing against aggressive tightening monetary policies from central banks to try and curb rising prices.
Live Silver Price – $/oz
Similarly, investors look to be choosing other haven assets to protect against sharp plunges on equity markets. While silver’s industrial appeal is dwindling against the context of a potential global recession looming.
Put all that together and it explains why silver is trading close to two-year lows. However, as soon as a shift in sentiment emerges, there is a strong fundamental case for silver to climb in the medium-term given its use in the key technologies and industries of our time, notably solar energy and in batteries for electric cars.
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.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwashing while investing sustainably.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.