The relationship between gold and the dollar often follows a linear inverse trend—one goes up and the other goes down—but silver has a much more nebulous connection to currency than its yellow counterpart. Silver, unlike gold, has special value as an industrial metal, meaning that its price point isn’t necessarily fixed. Major currency fluctuations, however, happen to scale silver value as investors look for fresh opportunities in a bear currency market. The increasing softness of the dollar has helped to push silver up to new heights, gaining value at some of the highest rates in recent market history.
Silver Gained Momentum in April
For much of spring, silver found itself caught in a stubborn growth cycle, threatening to rise above $16 per ounce but never quite hitting that figure. Analysts wondered whether silver had too much bearish momentum: the pressure of strong dollar performances kept the metal down without enough outside interest to give it any uplift. Then in the first weeks of April the market blew open any bearish momentum on silver with four straight weeks of growth for the white metal, pushing all the way up to above $17.50 per ounce. The Federal Reserve’s announcement to increase interest rates come June, a move meant to ease up on a strong dollar, gave silver a much needed shot in the arm. Trading sideways currently, the Fed decision could boost silver even higher.
How much silver growth could a softer dollar produce? The pushback against the dollar has lots of power left. The dollar is trading lower against every single one of its G10 peers, meaning that confidence in the greenback is hitting historical lows after last year’s currency surge. Silver, furthermore, hasn’t seen a correction that suggests the rise is part of a speculation bubble, as it has recovered all of its trading losses within the past 52 weeks. That’s great news for metals investors looking for more long-term certainty in an unsure market, as well as those who don’t trust the wobbly dollar as a mechanism for growth. Silver spot prices don’t appear to be trapped by an upward bound, meaning that there’s good growth on the horizon for silver.