A positive start to the final trading day of September has seen silver climb back above $23 an ounce and given hope to long-term holders of the metal that October may finally see a sustained price rally that has been promised for so long.
The case for a significant move higher for silver is based on its strong fundamental case in which industrial demand for the metal has been outpacing mined supply for a number of years and looks set to continue for a number of years yet.
However, the healthy fundamental outlook has been more than offset by the bearish macroeconomic environment over the last year or so that has seen interest rates steadily climbing and the US dollar be the dominant force on currency markets, both of which are bearish factors for non-yield bearing, dollar-priced physical silver.
Now with interest rates approaching their high, the pain of climbing rates should have long since been priced in, enabling the focus to shift back onto silver’s fundamental case. The first target for any significant rally for silver will be the highs of this year and last above $26 an ounce but if the wind does finally catch silver’s sails, a surge ultimately to $30 an ounce shouldn’t be discounted.
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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