Silver price trims losses as softer dollar and PPI anticipation support cautious recovery
Silver retreats 4% after CPI shock, recovers to $38 ahead of PPI test
Silver started this week on a strong note, reaching a high of $39.11, a level not seen in over 14 years.
However, this early momentum quickly reversed, setting off a sharp decline that pulled the price down by 4% to $37.55. The market reaction was over the course of two consecutive days, particularly on Tuesday, when the release of the U.S. Consumer Price Index data triggered heavy selling.
Highlights
-Silver fell to $37.55 after strong U.S. CPI data triggered heavy selling
-Silver bounces 0.8% today to $38 as traders eye PPI data for the next signal.
-RSI at 55 supports recovery while dollar strength keeps pressure on upside
The latest CPI report showed that the core CPI, month-over-month CPI, and year-over-year CPI figures all rose above the previous readings. This indicated persistent inflation pressures and dampened hopes for an imminent rate cut from the Federal Reserve. A cut would typically weaken the dollar and support commodities like silver, but the stronger data flipped this expectation. The resulting move pushed U.S. Treasury yields higher and lifted the U.S. dollar to its strongest level since June 23, putting further pressure on silver.
Silver price dynamic (June - July 2025). Source: Tradingview
Today, Wednesday, July 16, silver showed signs of stabilization and started to claw back losses. The Asian session saw initial buying interest that extended into the European session. By midday in Europe, silver was trading around $38, recording a 0.8% daily gain and recovering more than half of Tuesday’s losses. This bounce reduced the week-to-date gain to about 1%, suggesting that bullish sentiment is not entirely lost despite the earlier setback.
Silver RSI rises to 55 as price tests $38.80 resistance zone before PPI release
Technical indicators now provide a clearer picture of this short-term recovery. The one-hour RSI has turned bullish at 55, reflecting improving short-term momentum. The four-hour RSI, which had bounced near the neutral level instead of dipping into bearish territory, now sits at 55 as well, underlining resilience despite the initial price drop earlier in the week. Traders are closely watching whether silver can maintain momentum above the key $38 psychological support level, which could act as a foundation for further upward movement.
In terms of near-term price levels, silver faces an immediate upside target at $38.80, which corresponds to the previous day’s high. On the downside, support lies near Tuesday’s low at $37.57. The outcome of these levels will likely depend on incoming U.S. Producer Price Index data scheduled for later today. Market expectations set the core PPI month-over-month forecast at 0.2%, slightly above the previous reading of 0.1%.
Stronger-than-expected PPI data would likely fuel further inflation concerns, strengthening the dollar and potentially weakening silver again. Conversely, a weaker reading might offer silver a renewed boost by reviving hopes for a more dovish Fed stance. For now, silver traders appear cautiously optimistic, awaiting clear signals from economic data to shape the next decisive move.
Traders bought silver on tariff fears, but sentiment weakened after Trump signalled trade talks. Silver pulled back from $39.10 to $38.10 and held above the 50 EMA as support.
