There’s no doubt The Federal Reserve has surprised markets this week by talking about the potential for two rate hikes in 2023.
Federal Reserve Chair Jerome Powell also very clearly stated that their forecast should be taken with “a significant grain of salt” during his press conference.
Basically, the markets have been distracted by the narrative of higher inflation and higher interest rates, but they seem to have completely ignored the fact that any potential hikes are at least two years away. A lot can happen in two years!
If you look at the bigger picture, fundamentally, nothing has really changed. The Fed has reiterated that it will keep its benchmark interest rate near zero until 2023. It will continue with its massive quantitative easing program, while allowing inflation to run hotter than usual, for some time yet.
And let’s not forget the whole ‘Infrastructure spending boom and Green Energy Revolution’, which is currently taking shape across the global economy.
That still presents a significant window of opportunity for Silver traders, over the next two years at least.
Silver is not only an excellent inflation hedge, but it’s also a key component in everything from electric vehicles, renewable energy to 5G technology. Based on our proprietary research, photovoltaic demand for silver could exceed 3000 tonnes in 2021, while the 5G rollout – which is only just beginning – will be a major driver of demand for years to come.
Goldman Sachs see silver prices rising to $33 an ounce in H2 2021, boosted both investment and industrial demand for the precious metal – and our research suggests similar.
In my opinion, Silver is still definitely the best trade right now and any substantial pullbacks should be viewed as buying opportunities.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
Trading has large potential rewards, but also large potential risk and may not be suitable for all investors. The value of your investments and income may go down as well as up. You should not speculate with capital that you cannot afford to lose. Ensure you fully understand the risks and seek independent advice if necessary.