Higher US inflation deepens risk-off sentiment for silver amid stronger dollar

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Silver drops on US inflation and rate hike risk pressure

Highlights

Silver fell more than 3% after higher-than-expected US inflation data fueled speculation of further Federal Reserve rate hikes.
Rising US dollar and Treasury yields have increased the opportunity cost of holding non-yield assets like silver, reducing demand.
XAG trades below key short- and medium-term moving averages and momentum indicators favor sellers unless price recovers above $50.51.

US inflation and Federal Reserve rate hike bets weigh on silver

According to FXStreet, on November 12, 2026, silver dropped by over 3%, extending its losses after US inflation data came in higher than expected, which increased bets on further Federal Reserve rate hikes.

Rising expectations of tighter US monetary policy have pushed the US dollar and Treasury yields higher, making non-yielding assets like XAG comparatively less attractive. As funding and opportunity costs increase for holding silver, demand tends to soften in such macro conditions.

While no fresh supply-side factors were cited, the policy-driven demand impact was the dominant theme in recent market action. Effects from US inflation risk remain conditional on further signals from upcoming economic releases.

Policy tightening risk aligns with bearish short-term technicals

The 4H chart shows XAG moving below both the 20-period ($50.51) and 50-period ($51.67) SMAs, pointing to ongoing short-term and medium-term weakness. The price remains well beneath the daily 200-period SMA ($65.79), keeping the broader trend bearish.

With the H4 Ichimoku Kijun level at $51.21 acting as resistance and both MACD and ADX in sell mode, momentum appears to favor sellers.

US inflation trends and Federal Reserve decisions to set direction

External risks from US economic data and central bank decisions could keep XAG under pressure. A sustained recovery would require a move above the H4 MA-20 resistance at $50.51. Absent a break above this level, sellers are likely to remain in control in the near term.

Anton Kharitonov, expert at Traders Union, sees silver under persistent pressure as US inflation surprises and rate hike expectations drive up yields and the dollar. He notes technical signals are bearish, with price trading below short- and long-term moving averages and key indicators in sell mode. Policy-driven flows dominate, and without a move above $50.51, there is little support for buyers. "Until XAG reclaims the H4 MA-20 at $50.51, I remain defensive and view rallies as opportunities for sellers."

Earlier, analysts noted that silver was facing ongoing bearish pressure driven by hawkish Federal Reserve expectations and unfavorable macroeconomic trends. The current article reinforces this view, as rising US inflation data and tighter monetary policy remain the key factors to monitor for any potential shift in silver’s trajectory.

Source of Data: XAG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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