U.S. retail sales fell 0.6% in July. This figure missed economist forecasts of a 0.1% gain. The data marks a reversal from the 0.2% increase recorded in the previous month.
Cooling consumer spending suggests a slowdown in a primary economic driver. This trend aligns with recent soft inflation reports to dampen expectations for further Federal Reserve interest rate hikes.
Traders now price in a higher probability of the Fed holding rates steady in September. A less hawkish monetary outlook generally supports precious metals by weakening the U.S. dollar and lowering bond yields.
Lower yields reduce the opportunity cost of holding silver. While silver prices recently saw profit-taking after a rally, the weak retail data provides a fundamental tailwind for the metal.