The United States Federal Reserve and the Central Bank have raised interest rates to curb inflation. It helped to make the dollar rise, which normally moves in the opposite direction to silver, meaning that when the dollar exchange rate rises, the Live Silver Price falls. The US dollar is currently at its highest level in twenty years.
Silveris, of course, the most volatile of the two precious metals, but, nevertheless, it is often traded in relation to gold. Many investors are now considering a 401k to gold IRA rollover as a way to diversify their portfolios and protect their investments from market volatility. For its part, Tiggre believes that current market circumstances are conducive to silver surpassing gold and perhaps reaching triple-digit levels.
However, it warns investors not to rush to the market yet, not least because the rise in 10-year Treasury bond yields has caused precious metals to fall, which could cause silver and gold prices to fall even lower. This is largely due to the fact that the restrictions imposed by COVID-19 in countries such as Peru and Mexico, which are some of the main producers of silver, were lifted much earlier than in the rest of the world. While it is not yet clear how much of that goes specifically to solar energy, in which silver is key, it is expected to be a fairly important part, which would also help the demand for silver. This represents a gradual step forward by the government towards economic reopening, which benefits the price of growth-sensitive and industry-linked commodities, such as silver.
We recommend that you always do your own research and consider the latest news on the price of silver, market trends, technical and fundamental analysis, and expert opinions before making any investment decision. However, the decline in supply from Kazakhstan, Russia and Australia is likely to lower prices, stabilizing the silver outlook somewhat. Rate cuts are usually good for the physical prices of silver and gold bars, because when rates are lower, it is more profitable to invest in precious metals than in products that can generate interest. According to a report by the London Bullion Market Association (LBMA), the supply of silver has recovered at a much faster rate than demand, and the biggest increase in supply is coming from Latin America.
On the other hand, during economic uncertainty, silver values are affected by the decline in manufacturing demand. As such, the outlook for silver for the rest of the year seems rather bleak, with demand for silver even lower in the short and medium term. Whether silver is the right investment for you depends on your risk tolerance, market outlook, and whether you expect it to rise or fall further, among other factors. This is likely to lead to reductions in sales of electronic products and cars, driving significant industrial demand for silver.
As many analysts point out, silver is known to surpass its sister metal, gold, in times of economic prosperity and expansion. However, demand for silver, especially the demand for jewelry among major consumers in India and China, declined as sales of jewelry in stores fell, due to the closure of several stores following the COVID-19 outbreaks.