RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Metals

The Silver Market and The Federal Reserve

Posted 05/02/2019 9:21AM CT | Frank J. Cholly

The Fed, as expected, decided yesterday to leave rates unchanged. Fed Chairman Powell’s comments came across more “hawkish” than “dovish” and this seemed to disappoint some traders in the market who were looking for a rate cut. Bottom line here is that the labor market remains strong and the Fed expects wages to increase. That is the main reason why the current low inflation environment is considered to be transitory. It won’t last.  More people working and earning more money will spend more money.

So, not only is the Fed not leaning towards a rate cut at this time, but it’s possible to see a rate later in the year. They didn’t say those words, but they did say that the economy is in good shape!

Silver futures and other precious metals remain under pressure. My next level of support for the July contract comes in around $14.45. Whenever it is that inflation becomes “undeniable”, you should expect silver to return to a longer-term bull market. It’s a question of when, not if.

Silver Jul ’19 Daily Chart

Silver Jul '19 Daily Chart

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Frank J. Cholly

Senior Market Strategist
Frank brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.
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