- Silver prices will face another test today from the US Producer Price Index data after yesterday's 6.1% collapse.
Current setup
Silver prices suffered a steep sell-off following the release of red-hot US Consumer Price Index data on 14 October. Front-month futures fell 6.1% to $55.55/oz, an 11-month settlement-price low. The data set revived expectations of further Fed tightening and led to broad-based US dollar strength.
After an initial spike to 5.33% following the release of hotter-than-expected US Consumer Price Index data for September, the US 10-year Treasury note’s yield fell to 5.087% in early Thursday morning trading, hitting a 3-week low. This marks a sharp reversal as traders piled into safe-haven US government bonds amid the deep selloff in the equity market, particularly the tech-heavy Nasdaq index. This could give silver a chance to stage a relief rally ahead of September’s Producer Price Index data at 08:30 am EST.
Silver’s direction this Thursday will depend on whether an additional shock comes from the US Producer Price Index data set and how the US 10-year Treasury yield responds. The white metal now has elevated interest-rate expectations as a major headwind. However, continued industrial demand and safe-haven flows could provide support.
Silver Price: Key market drivers
1. US Inflation and Fed Expectations
US September headline and core CPI data sets beat market expectations. The surprise inflation prints revived expectations of Fed tightening, spiking US Treasury yields and driving flows away from non-yielding metals and into USD-denominated assets. However, the selloff in tech stocks and US indices pushed traders into bond markets, and strong demand drove down Treasury yields, leading to a USD retreat in the Asian session. This could provide support for a snap rebound ahead of the US PPI data. This is more of a technical retracement and not a reversal.
2. Industrial Demand
Silver’s substantial industrial exposure to the electric vehicle ecosystem, renewable energy production, solar technology, and electrical applications provides demand-based support for the white metal. However, concerns are emerging about the impact of prolonged Middle East geopolitical tensions on global technology investment and industrial activity.
3. Oil and Geopolitical risk
Elevated oil prices provide a complicated outlook. On one hand, safe-haven demand supports defensive entries into silver, providing some support. But higher oil prices raise inflation risks, as recent US CPI data show. Inflation will encourage a hawkish interest rate response from the Fed, which will also raise real yields and push flows away from the non-yielding silver asset. Furthermore, an inflationary environment reduces demand for luxury and discretionary consumer goods that drive some of silver’s demand, such as EVs and mobile phones.
Silver Price: Forecast scenarios
Bull case: The decline in US bond yields supports a recovery above $57.00, with targets between $58.50–$60.00 coming into play. Cooler-than-expected US PPI data today will also support this case scenario.
Base case: Silver could consolidate between the $54.60 support and the $60.00 psychological price barrier if US PPI data conflicts with yesterday’s US CPI data. This could cause a reassessment of the Fed’s policy route.
Bear case: If US PPI data also comes in hotter than expected, with an attendant rise in US bond yields, we could see a breakdown of the $54.60 support, exposing downside targets at $53.50 or lower.
Technical Outlook
The support bounce at 54.60 remains muted as traders await PPI data. A breakdown of this support brings in downside targets at 48.64 (21 November 2025 low) and 45.83 (28 October 2025 low), in that order.
On the other hand, the support bounce needs extra momentum to challenge the 60.00 psychological barrier. If this resistance is cleared, the 63.98 resistance (6 February 2026 low) comes into the picture. Only when this barrier is uncapped can the 28 August high at 71.00 come into the mix.