The movements of the USD and real yields together provide the best fundamental outlook for silver. When real yields and the USD are moving lower that sends silver higher. The path of real yields and the USD will depend on the monetary policy outlook of the Fed. This post is written just before they meet, so that outcome will decide whether it is sink or swim time for the Fed. A dovish FOMC can offer a great opportunity to see silver longs. The seasonal pattern for February is also very strong for silver. However, a hawkish Fed with a sooner QE end, faster hikes, and a quicker start to QT would all sink silver.

From January 25 to February 24 silver has risen 11 times in the last 15 years. The average return has been 4.67%. Will silver follow its seasonal pattern if the Fed are more dovish than the market was expecting?

Major Trade Risks:

• The main risk for this outlook is if the Fed has taken a more hawkish stance.
• Also, if Russia makes an incursion into Ukraine that is likely to see the USD strength and weaken Silver in the near term.