The price of silver largely followed gold’s trajectory this week, below $19 per ounce all week during the doldrums of summer ahead of the Federal Reserve announcement Friday. Silver opened the week at a seven-week low overnight, pushed downward by key outside markets: the dollar was strong and oil was lower.
All week long, silver was extremely sensitive to any movement in the gold price. A lower price trend has emerged in the silver market, indicating potential weakness in the short run. However, silver rose dramatically on Friday after Janet Yellen’s speech, breaking its strong correlation with gold as the yellow metal first spiked then dipped. The gold to silver price ratio stood at 71.24, lower than it has been recently.
Federal Reserve rate hikes could potentially move precious metals either direction, and Yellen indicated that there is more strength gathering for a hike soon, but that the Fed is still waiting to see where the economy goes. The first half of 2016 was abysmal for U.S. economic growth, so the waiting game continues.