Silver is starting a new trading week but nudging up above $23.50 an ounce as the prospect of central banks around the world, including the Federal Reserve, the European Central Bank and the Bank of England, nearing the end of their cycle of interest rate hikes presents a more accommodative environment for the precious metal.
Silver has been subdued for much of the last year as a result of the Fed implementing a series of interest rate hikes, making the non-yield-bearing silver less attractive as a result. This has forced silver to trade well off the high touched in March last year before the Fed announced its shift in policy even though the fundamental outlook for the metal has remained very strong throughout.
Now as we look to be entering a period of stable, albeit relatively high, interest rates, this could present the opportunity for the focus to shift back to silver’s healthy industrial demand, with the metal a key component of the energy transition.
Given silver has been in a supply deficit for the last few years and looks set to remain that way for a considerable while yet, the price could soon fly up towards the highs of the last year and this above $26 an ounce and potentially on to $30 an ounce.
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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