Silver set to soar? [Video]

Giles Coghlan LLB, Lth, MA Financial Source

One of the key data points for US policy is set to be released on Wednesday 11 May at 13:30. That is the US inflation data. The headline is expected to come in at 8.1% y/y and the core reading at 6% y/y, but if we see a print below minimum expectations for both of these data points then watch for USD weakness. The Fed is hiking rates to contain surging inflation, but if the inflation data today hints that the US is passed ‘peak inflation’ then that can weaken the USD and cause yields to drop. Remember, when real yields fall and the USD falls then precious metals like silver and gold usually gain. Will a US CPI miss today send silver soaring higher?

The seasonal pattern for silver is coming into a strong period over the next summer. Between June 29 and August 02 silver has gained 14 times in the last 25 years. The average return has been +3.42% and the annualised return has been 43.87%. Will silver be set to rise on Wednesday ahead of its historical summer seasonal gains?

Major trade risks:

If US CPI remains high, and the US has not passed peak inflation, then that will keep up expectations of even more aggressive Fed action.
Slowing global growth tends to support the USD as well and that is a key risk to this outlook.

HYCM clients can access the Seasonax product in order to analyse over 25,000 currency pairs, indices, commodities, as well as individual stocks. Please contact your account manager for a free trial. Certain products & services mentioned herein may or may not be available to all clients depending on which HYCM Capital Markets Group entity their trading account(s) adheres to.

Learn more about HYCM

Author

Giles Coghlan LLB, Lth, MA

Financial Source

Giles is the chief market analyst for Financial Source. His goal is to help you find simple, high-conviction fundamental trade opportunities. He has regular media presentations being featured in National and International Press.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.