Silver’s recent fall has seen it dip back below $19 an ounce towards the lower end of its recent range. How the precious metal responds to its latest dip, prompted by the need for further aggressive interest rate hikes by the Federal Reserve, will be crucial in determining the amount of buying support that remains for silver.
In recent weeks, silver has shown price resilience with any dips leading to buying interest from investors noting the strong fundamental case that can be made for the metal given its role as a key component in the energy transition. This was certainly the case throughout September with the price of silver trending steadily higher over the course of the month.
So far October has seen a reversal of silver’s fortunes as the focus has shifted back on the need for central banks across the world to continue implementing significant rate hikes to try and bring persistently high inflation back down to their target range. Yet while the hawkish monetary policies are putting a significant ceiling on silver’s upward price potential, the current levels still represent a metal that is undervalued given its supply and demand fundamentals.
Therefore, this week may well see the price tick back up above $19 and towards $20 an ounce as the severity of the reaction to last week’s high US inflation figure unwinds.
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.
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