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$SLV: The Inflation Bid Was Already Spent
Wednesday's CPI took the hike scare out of gold and silver. Thursday's PPI confirmed the story — and the people who bought the metal into the data sold it.
Key Points
- Wednesday's in-line CPI (3.4%) took hike-scare out of metals. Thursday's flat PPI confirmed the story and the bid was sold.
- The PPI headline was soft. The pieces that feed the Fed's preferred gauge firmed. That is why the metal did not get a second bid.
- SLV volume fell from 18.6 million shares Wednesday to 11.7 million Thursday. The trust still holds 493 million ounces. Shares are cheap to the bars.
- Miners fell harder than the metal. Treasuries bid. This was de-risking a relief trade, not a vault run.
- Citi's industrial-to-investment handoff is the medium-term fork. Thursday did not settle it.
What To Watch
- August PCE — the print that can put the hike back on or bury it.
- Whether SLV's discount to the bars shrinks or widens. Widening = more paper selling.
- Whether miners keep underperforming the metal (risk off) or catch up (dip buyers).
- Beth Hammack and other Fed speakers: hike talk vs hold talk.