Silver Price Rallies After Fed Hikes Interest Rates
After two days of monetary policy meetings, the US Federal Reserve officially announced the second interest rate hike of the year on Wednesday (June 13).
The Fed lifted the target federal funds rate by 25 basis points, from 1.75 percent to 2 percent, sending silver sailing upward, crossing over the US$16-per-ounce threshold it has been straddling for some time.
“Silver prices meantime broke to the top of their recent dollar trading range, reaching the highest dollar price since mid-April,” said Adrian Ash, director of research at BullionVault.
He added, “[it touched] 7-month highs for Euro and also British pound investors.”
The Fed hike has added to the white metal’s gains in June, pushing the precious metal up by 3 percent for the month.
On Tuesday (June 12), Commerzbank (OTCMKTS:CRZBY) noted that silver may draw upside momentum if it is able to break through US$17.
Commerzbank said, “[t]he technical picture here has improved noticeably in recent days. If the price were to exceed the US$17 mark, this could lure in further buyers and continue the price rise.”
The firm added, “[s]ilver has certainly made good some ground vis-à-vis gold in recent weeks — the gold/silver ratio has dropped below 77, its lowest level since early January.”
Since the Fed hike has pushed the white metal over that US$17 point, market watchers believe that the notion of silver outperforming gold could become a reality sooner rather than later.
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