Silver is trading towards the bottom end of the range it has found itself stuck in for the whole of the year so far with the price currently at around $23.40 an ounce.
The main focus for markets today will be the latest interest rate decision by the Federal Reserve, with a 25 basis point increase to benchmark rates widely expected. For silver this should be another positive factor with confirmation that the Fed is slowing the pace of its hikes and ultimately nearing the end of the aggressive policy it adopted in the second quarter of last year.
It was this switch to a series of 75 basis point hikes by the Fed that saw the price of silver plummet from close to $26 an ounce in April down to below $18 an ounce in early September. While today’s hike has long since been priced in, assuming the Fed does conform to expectations, the key for traders and investors will be what is said about future hikes in the supporting statement and comments by Fed Chair Jerome Powell.
If there is a clear indicator that the peak of interest rates is coming very soon then this could finally be the catalyst that silver has been searching for to shake it out of its stupor and surge up to the high $20s an ounce that better reflects its strong fundamental outlook and a welcoming macroeconomic environment.
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