Silver is trading just below $25 an ounce as investors assess the latest round of earnings and try to determine the true health of the global economy.
In this environment, silver is working out which of its different hats is most applicable. Its safe haven appeal and lack of counterparty risk can bolster demand at times when market confidence is low, as was certainly the case during last month’s US banking crisis. Yet the metal also has considerable industrial exposure so a healthy global economy is important for physical demand.
Finally, investors need to weigh up how much further the Federal Reserve and other central banks are likely to keep hiking interest rates with the metal’s lack of yield reducing its appeal during times of rising rates.
As such, the current situation in which earnings reported so far point to a relatively healthy global economy mixed in with an investor mindset which is fearful of putting too much risk on the table plays nicely into silver’s dual appeal and should see the price hold close to $25 an ounce, with the potential to push higher again.
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