Posted 4th November 2022

Silver Tracks Up Towards $20 Trying to Shake Off Pressure From Rate Hikes

market analysis silver

Silver is tracking up towards $20 an ounce after shaking off this week’s large interest rate hikes by both the Federal Reserve and the Bank of England.

Even though both central banks raised their rates by 75 basis points, as both of these were in line with expectations, the impact on silver from these hikes had long since been priced in.

It is interesting to see how the silver price keeps striving to make gains despite the pressure imposed on it from the series of interest rate hikes implemented by the Fed in particular. It was after all the US central bank’s switch to its current aggressive stance that prompted the price of silver to plunge from $26 an ounce to below $18 an ounce over the course of a few months earlier this year.

So the fact that silver has been on an upward trajectory from mid-October onwards points to investors switching their focus away from the short-term impact of rising interest rates and towards a 2023 in which hikes are expected to be both fewer and smaller allied to a strong fundamental outlook for the metal.

Fed Chair Jerome Powell’s comments that followed Wednesday’s interest rate decision didn’t give much away in terms of the US central bank’s determination to keep raising rates to curb inflation so investors will need to be cautious in assuming that 2023 will be as dovish as they perhaps expect. That said, silver looks to be building up a strong bedrock of support so that the moment the Fed lets off the pressure, the price could surge and quickly regain all the ground lost in 2022.

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