Silver’s steady climb back up towards $20 an ounce has performed a volte-face as inflation data out this week showed that consumer prices are continuing to rise at an uncomfortably fast pace, increasing the likelihood of significant rate hikes by central banks across the world, in particular, the Federal Reserve when it announces its latest move next week.
Silver’s recent declines have pushed the price back below $19 an ounce but unlike its golden peer, silver remains significantly above its low for the year.
Silver finds itself in a strange place where the slew of aggressive rate hikes by the Fed has caused its price to plunge to levels last seen in 2020 before two tentative recoveries have seen it try and climb back to around $20 an ounce before falling again.
Clearly, hawkish central banks are negative for a non-yield bearing asset like silver but with the price already having been hit so hard, there is little downside space for further declines. As such, the latest dip may encourage buying interest from traders and investors who continue to see silver’s more positive medium to long-term outlook with the metal in high demand from the solar and battery industries.
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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