Wall Street Silver: Silver Under $20 Here’s What You Need to Know
Typically, commodities are an inflation hedge. But they’re dropping right now too. That includes gold, which is down about 5 percent so far this year. While better than the stock market, in a period of multi-decade high inflation, it feels like a poor performance.
Silver has likewise tumbled, and now trades for under $20 per ounce. Both precious metals may tumble further in the coming months as the economy slows.
For precious metals, the gold/silver ratio is back to 90, a level last seen during the Covid selloff. That suggests that silver may be the better performing metal going forward for investors looking in the space.
While the price has gone down, the premiums for physical metals has been high due to strong demand. Investors are buying physical metals right now, even if they haven’t held up against inflation.
Meanwhile, refiners report that they can’t keep up with this strong demand, and there may be a shortage of physical metals in the coming months. Should that happen, the spot price may surprise to the upside later this year.
Prices could move lower, even with strong demand. With the economy slowing and the US likely in a recession, it’s likely that spending will lower. But as soon as the Federal Reserve ends its current rate hikes, it’s likely that metals could take off and be a winner.