Silver Slides to Seven‑Month Low Near $57 as US Inflation Data Looms

Silver (XAG/USD) slipped modestly on Thursday, hovering near seven‑month lows around $57.00 after a nearly 12% drop over the prior two sessions. Growing expectations of further Federal Reserve rate increases later this year have weighed on precious metals, with investors awaiting the upcoming US Personal Consumption Expenditures (PCE) Price Index release for confirmation.

A string of upbeat US economic indicators — notably a strengthening labour market and inflation running above target — has nudged Fed officials toward a more hawkish tone. Markets now assign a roughly 32% probability to a rate hike at the next policy meeting and a 65% chance of some tightening in September. The prospect of higher rates has lifted US Treasury yields and bolstered the dollar.

Thursday’s calendar is crowded with data releases, but the spotlight falls on the May US PCE Price Index. Analysts expect the index to show a 4.1% year‑on‑year increase, the highest reading in three years, reflecting data that precede the recent drop in crude oil prices. That outlook is unlikely to lend much support to silver.

Technical Analysis: Intraday RSI shows oversold levels

XAG/USD is trading at $57.14, maintaining a bearish short‑term bias as the intraday RSI sits near 20, signaling oversold conditions. The MACD histogram remains negative but is converging toward zero, hinting that selling pressure may be waning.

The December 4, 2025 low around $56.45 continues to provide a floor, with the next support zone seen in the mid‑$54 range, corresponding to the October and November 2025 highs. A deeper decline would test the November 21, 2025 trough near $48.64.

On the upside, any rebound is likely to encounter resistance near the former support level at $61.40, followed by stronger barriers around the June 22 high in the $67 area and the June 17 peak near $71.60.

(The technical analysis in this article was assisted by an AI tool.)

Silver FAQs

Silver is a widely traded precious metal that investors use as a store of value and a medium of exchange. While it is less popular than gold, traders often add silver to their portfolios for diversification, its intrinsic worth, or as a potential hedge during periods of high inflation. Exposure can be obtained through physical bars or coins, or via exchange‑traded funds that track its price on global markets.

Silver prices fluctuate with a variety of influences. Geopolitical tension or fears of a deep recession can boost its safe‑haven appeal, though typically to a lesser extent than gold. As a non‑yielding asset, silver tends to gain when interest rates fall. Its valuation also moves inversely with the US dollar, since silver is quoted in USD (XAG/USD); a stronger dollar usually caps silver prices, while a weaker dollar tends to lift them. Additional drivers include investment demand, mine supply — silver is far more abundant than gold — and recycling rates.

Industrial demand plays a major role in silver’s price dynamics, especially in electronics and solar energy, where its electrical conductivity exceeds that of copper and gold. A rise in industrial consumption can push prices higher, whereas a decline tends to drag them down. Economic activity in the United States, China and India also matters: the US and Chinese industrial sectors consume silver in many processes, and in India, consumer demand for silver jewellery remains a key price determinant.

Silver often tracks gold’s movements. When gold rises, silver usually follows, reflecting their shared safe‑haven characteristics. The gold‑to‑silver ratio — indicating how many ounces of silver equal one ounce of gold — can help assess relative valuation. A high ratio may suggest silver is undervalued or gold overpriced, while a low ratio could imply the opposite.

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