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  • Metal Market Report July 2025 - Week 3 Edition

Metal Market Report July 2025 - Week 3 Edition

July 2025 - Week 3 Edition

Fed Curiously Ignores Pressing Need to Cut Interest Rates

On Tuesday, July 15, the Consumer Price Index for June was released, reflecting yet another mild rise, up 0.3% on a seasonally adjusted basis. Over the past 12 months, the CPI is up 2.7%. Shelter costs rose 0.2%, energy rose 0.9% and food increased 0.3%. The “core” index rose 0.2% in June, following a 0.1% increase in May, yielding a super-low 1.8% two-month annual rate.

Then, on Wednesday morning, the U.S. Producer Price Index (PPI) for June was released, showing zero increase in prices, month-over-month. The 0.0%, change was the same as in May. That came as a shock, since economists had expected a +0.2% increase. The “core” rate was also 0%. Year-over-year, the PPI increased by 2.3%, below the expected 2.5% increase.

That proves President Trump has fulfilled his campaign promise to lower inflation while forcing our major trading partners to reduce their tariffs and help solve our chronic trade deficits. This partial success story has eluded the attention of the Federal Reserve Board, which actually cut interest rates by a shockingly high 0.5% (double the normal rate change) just before the 2024 election. The Fed has curiously failed to cut rates at all during Trump’s first six months, showing to some their bias in favor of the Democrats over Trump, as stated in Thursday’s Wall Street Journal.

Specifically, the Fed cut rates by 50 basis points (0.5%) on September 18, 2024, and another 25 basis points on November 7 and December 18, 2024, but the Fed has not followed their previous guidelines and cut rates at all in the first six months of the Trump Presidency, despite super-low inflation rates for six months. The Fed refuses to cut rates for fear of tariff inflation, even though little inflation is evident. Also, these new tariffs have raised $100 billion in tax revenue in six months, providing a new source of federal income revenues, while tariffs generated only about $6 billion per month under Biden.

In 2023, Federal Reserve Chairman Jerome Powell consistently emphasized a data-dependent approach to monetary policy decisions over future predictions, as published by Bloomberg on July 26, 2023. That guiding principle has changed since President Trump took office, maybe due to new factors but still seemingly hypocritical to some.

This is not just due to Federal Reserve Chairman Jerome Powell. There are over 300 PhD economists at the Fed, nearly all of them trained in the Keynesian economic models of intervention rather than listening to the markets and the people. Interest rates are already declining around the world and in the U.S. but the Fed seemingly refuses to acknowledge this fact and continues foisting excessively high inflation fears from future tariffs. Keeping rates high creates a large interest component of the yearly U.S. National Debt that President Trump has to deal with.

Silver Price Predictions Reach the Stratosphere, at $200+

Silver has just surpassed gold’s performance, year-to-date, breaking $38, up 30% so far this year, versus the 26% gains in gold.  Last week, a COMEX (commodity exchange) executive predicted silver could rise at least four-fold in the next few years. While we are skeptical of predictions of any huge price jumps – we prefer a solid, slowly rising bull market – his views are worth a listen:

On July 12, 2025, Michael Oliver, who once worked directly with the Chairman of the COMEX during the bubble-like late 1970s bull market – when silver hit an all-time record of $50 – told King World News he now predicts the price of silver will hit $160 to $240 an ounce. In explaining this super-high price, Oliver said, “Silver is compensating for having been restrained for so long by forces that are trying to hold it back.” He argued silver has been under 2% of the price of gold for a long time but should it return to its historic 16:1 ratio to gold, silver would be over $200.

We would dispute any historic “natural ratio” of silver to gold, since the 16:1 ratio was set by government regulations and were heavily influenced by silver mining interests. Since both metals are now free to compete in the open market, the gold/silver ratio has been much higher.

Still, silver has some catching up to do after previous years of lagging behind gold. Silver’s recent rise reflects anticipation of an economic boom, bolstering silver’s greater use (vs. gold) in industry. Remember, we told you that industrial silver demand increased in 2024 and demand for silver in 2025 should continue, resulting in supply deficits for the fifth year in a row as the London Bullion Market Association predicts silver and gold to significantly rise in 2025.

Silver has now surpassed gold in the annual sweepstakes, up 30% as of mid-July vs. 26% gains for gold but we’re now seeing even bigger gains in platinum and palladium this year. Platinum’s price is at $1,420 an ounce (up 59% this year) and palladium is $1,265 an ounce (+51%) on July 16, pointing to the rising industrial usage of silver and the Platinum Group Metals this year. While all eyes have been on gold beating stocks and the dollar so badly, the Trump economic recovery with rising industrial use of silver is helping the other precious metals, as well.

 

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