Shimmering silver in Fed’s Blackout Period!

Published 1 month ago at 06 Dec 2022

The outlook for the Federal Reserve is mixed. 
 
On one hand the US economy could be heading towards a recession next year. The November FOMC minutes stated that it was the ‘base case’. Slowing business activity, the cost of living, falling export demand and higher debt re-payments all point to the Fed needing to slow the path of rates.  
 
However, last Friday’s strong jobs prints suggest that the Fed may need to hike more aggressively and go higher than 5% next year.  
 
The headline was above market forecast at 263K vs 200K expected and the prior report was revised higher The Fed will not want to see a wage-price spiral enter into the US economy and higher wage growth with average hourly earnings last at +5.1% above the +4.7% maximum is really a concerning sign for the Fed that a wage price spiral is underway.  
 
However, a US recession, peak US rates, and a falling USD would all support precious metals like gold and silver. So, silver’s  seasonals could be really with investigating 
 
Over the last 25 years silver has a strong bias for strength . You can see it has gained 19 times and only lost value 6 times with an average return of 8.10% 
 
Major Trade Risks: 
There are clearly two way risks here as much will depend on the path of US rates, the USD, and inflation over the coming weeks. 
 
Remember, don’t just trade it, but Seasonax it! 


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