Silver's Retreat to $22 per Ounce: Assessing the Path to Historic Highs

The silver market has experienced a retreat, bringing its price back to the range of $22 per ounce. This has led to questions regarding the future trajectory of the metal and whether it has the potential to reach historic highs. Richard Snow, a strategist at DailyFX, highlights the current delicate position of silver. On one hand, it benefits from a weakened US dollar, driven by positive inflation data in the United States. On the other hand, as a non-interest bearing asset, it may face challenges as interest rates are expected to remain elevated until the second half of the following year. The direction of silver will ultimately be influenced by the dominant factor between these two, although recent trends have shown that silver is more sensitive to dollar declines rather than rising interest rates. This suggests a potentially positive outlook for silver's upside potential.

 

FXMAG.COM:

The silver price has made a retreat back to the area of $22 per ounce. What's next for the metal - does it have a chance to head toward historic highs?

 

Richard Snow:

Richard Snow, Strategist at DailyFX said, "One of the most traded commodities, Silver is in a precarious position currently. On the one hand it benefits from a lower US dollar after a string of encouraging inflation data in the US. On the other hand, the non-interest bearing metal could be overlooked as elevated interest rates are expected to remain in place until the second half of next year. The path for silver will be determined by the more dominant of these factors with recent history revealing greater sensitivity to dollar declines than rising interest rates – improving the outlook for silver's upside potential.