The ounce of gray metal was trading at $19.50 on Friday, September 23, a decline of nearly 15% since the beginning of 2022.
In 2022, silver is looking grey. The ounce of grey metal (31.10 grams) has melted and slipped below the 20 dollar mark (20.30 euros). On Friday, September 23, it was trading at $19.50, a decline of nearly 15% since the beginning of the year. Yet it is still prized by industry, eager to slip it into solar panels, wind turbines or electronic equipment. Not to mention that it still inspires jewelers. However, the eyes of investors are riveted on other horizons.
They are obsessed with the dollar, which is in an unprecedented upward spiral. The greenback’s rise, which had already begun, was accelerated by the invasion of Ukraine by Russian troops on 24 February. The threats made by Vladimir Putin on Wednesday 21 September – the Russian president said he was ready to use “all means” to defend himself and called for the partial mobilization of his reservists to fight on Ukrainian territory – pushed the US currency to its highest level in 20 years.
The dollar, strengthened by its safe haven status, is also benefiting from the strict monetary policy of the US Federal Reserve (Fed). Anxious to intensify the fight against inflation, the central bankers in Washington raised their key rate once again on Wednesday, increasing it by 0.75 points. Above all, they ruled out the possibility of a rate cut before 2024. The Fed’s objective is to bring inflation down to 2%. However, the Japanese central bank’s intervention to support the yen on Thursday, in response to the U.S. move, has somewhat dampened the greenback’s ardor.
Reduced speculative heat
In this unfavorable context for precious metals, silver is not rolling over gold. But it is not alone in losing its luster. The yellow metal is also less bright on the markets. While its price peaked at the beginning of March at more than 2,000 dollars an ounce, at the height of speculation on all raw materials fueled by the conflict at the gates of Europe, it has fallen back below the 1,700 dollar mark, to 1,660 dollars. This represents a drop of almost 20% from its peak. The rise in interest rates makes US government bonds more attractive, and reduces the attractiveness of gold. The same correction is taking place in platinum.