One of the strongest months for silver is July. This in part mimics the strong pattern seen in July and August for gains in gold prices. One of the key reasons for silver’s current weakness has been the strong USD and the continual march higher in US Treasury yields. However, this could change if the Federal Reserve sees the need to pause its aggressive rate-hiking policy. One of the key reasons for this would be if the core US PCE inflation data falls lower and below minimum expectations. It will mean the Fed will likely need to hike at a slower pace than perhaps feared. This should weaken the USD, cause a fall in yields, and lift silver. Will silver see gains this July?

Major Trade Risks:

• Any high inflation prints out of the US can invalidate this outlook.
• If the Fed signals a faster rate hiking cycle then that can invalidate this outlook.

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