The silver price made gains of 0.21 percent in the first quarter of the year, supported by a weaker US dollar and inflation.

While gains were initially offset by expectations over a US Federal Reserve’s interest rate hike, silver headed in an upward motion in March after the hike became official.

In addition to the factors mentioned above, analysts also predict that silver will post a supply deficit this year, propping up prices.  

Read on for an overview of the factors that impacted the silver market in Q1, plus a look at what investors should watch out for in the next few months of the year.

Silver price update: Q1 overview

In the first quarter, the silver price rose 0.21 percent. As the chart below from Kitco shows, silver experienced several ups and downs during the period, but reached its highest point towards the end of January.

silver-3m

Chart via Kitco.

In fact, the precious metal found its highest point on January 24, reaching US$17.54. Silver prices increased 0.2 percent on that day, with the support of the US dollar hitting a three-year low after comments that US Treasury secretary Steven Mnuchin welcomed a weaker currency had surfaced.

Meanwhile, silver fell to its lowest point of the quarter on March 20, trading at US$16.14. The gray metal hit this low when the US dollar strengthened ahead of the Federal Reserve meeting regarding a potential interest hike. That’s because higher rates tend to curb the appeal of holding non-yielding assets such as silver.

Silver price update: Factors to watch

As the second quarter of the year begins, investors interested in the silver market should be aware of a number of factors that could impact the precious metal’s price.

Much like gold, most analysts agre