Will gold continue to rise in September?

Gold has brought negative returns every September since 2017, according to a report from Heraeus.

“This time around, indicators suggest a pullback may be imminent,” the report states, but also notes a potential upcoming rate cut from the Federal Reserve could stave off a correction.

Last week, the U.S. 2-year yield dropped to a new low of 3.87%, below the Federal Funds target rate of 5.25 to 5.5%, meaning the probability of a more substantial 50-basis-point cut has increased.

“The swaps market currently sees a 38% probability of this outcome, up from 24% a week ago,” the report reads. “A larger cut to interest rates is likely to weaken the dollar more, and thus the gold price would be expected to rise more.”

What’s the outlook for silver?

Heraeus reports silver production is increasing in Peru, despite the country experiencing a consistent drop in output since 2016. This increase in supply could bring more downward pressure on the white metal, which retraced to under $29 an ounce at the end of last week. Silver has attempted to hold above $30 an ounce several times over the past six months but has yet to hold the milestone.

“This year, output (in Peru) was forecast to drop by 556 tonnes,” the report reads. “However, in the first half of the year, the country produced 1,592 tonnes of silver, an increase of 10% year-on-year.”