As much as last week’s silver price story was all about the Federal Reserve, it seems the rate hike’s boost to the U. S. dollar may be starting to fade. The greenback fell for three straight sessions last week, dropping from 97.75 on Tuesday, June 20, to 97.30 on Friday, June 23.
That doesn’t mean the dollar’s near-term strength is over, but as I also pointed out in my last gold update, the dollar’s upside could be limited.
New York Fed President William Dudley admitted just days ago that U. S. inflation was low. It reached 1.9% in May, below market expectations of 2% and below April’s 2.2%. Despite lower-than-expected inflation, Dudley indicated the Fed could plan to keep steadily hiking rates. In turn, the dollar could weaken, supporting silver prices in 2017.
Like gold, silver last peaked at $17.71 on June 6, just as the dollar was bottoming. But the metal’s action over this past week is starting to look like it has also bottomed out. This has me thinking the price of silver has much more room to run higher this year. In fact, it could gain as much as 33% by the end of 2017.
This post was published at Wall Street Examiner on June 26, 2017.
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