Silver remains stuck in the doldrums with the price continuing to drift between $23.50-$24 an ounce, a range it has been stuck in since the second half of December.
While this week brings interest rate decisions from the Federal Reserve, the European Central Bank and the Bank of England, none of these are likely to materially impact the silver price, assuming the three banks raise their rates in line with market expectations.
Indeed, the Fed’s likely 25 basis point increase has been talked about, and therefore priced in, for so long that investor focus has shifted to where the US central bank sees rates going in the coming months and how soon it will stop hiking rates altogether.
While this softening of the Fed’s stance is welcome for silver investors, with the Fed’s series of hikes in 2022 the main reason for silver’s plunge from April to September last year, the precious metal has failed to gain as much as gold has on the same news.
For now, gold’s rally looks to have peaked with its price stabilising around $1,930 an ounce and this may allow for a reassessment of silver’s relative value to its precious metal peer now that the price ratio between the two has blown out to more than 80.
A less aggressive Fed, signs that a global recession is less likely to happen this year plus the increasing pace of the energy transition all point to a great year for silver. Yet for now silver is barely in the starting blocks.
However, once it finally gets its 2023 race underway, expect silver to race away and start challenging the highs of both last year and even those touched during the famous silver squeeze of early 2021.
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 greenwash 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.
