Silver investors will be hoping that the recent tentative recovery that sees the metal once again trading above $18 an ounce is evidence that the price has well and truly hit its bottom after the false hope of July’s recovery.
The metal remains under considerable pressure from central banks across the world intent on raising interest rates as they try to bring runaway inflation under control. Yet while it is hard to see silver making huge gains in such a hawkish environment, the price had fallen so far below its true value, given a buoyant fundamental demand outlook, that the metal represents a buying opportunity.
Its lack of yield may make it less attractive at times of rising interest rates while a US dollar trading near its record level presents a further headwind yet silver remains a highly important metal used in key sectors of the energy transition such as in photovoltaics for solar panels and in batteries for electric vehicles.
From this perspective, it is hard to justify quite why silver has sunk so low and traders are taking advantage of its cheapness to increase their exposure with the aim of benefiting once these hawkish clouds clear.
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.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basi
