Silver Price Forecast: $58 Floor Exposed as Blazing 4.2% May CPI Shatters Rate-Cut Scripts; PPI Ahead

Quick overview

Silver is now in a brutal macro and technical washout phase. On Thursday, June 11, 2026, spot silver prices moved sideways with a very defensive tone during the first hour of the US session, as spot silver prices were trading close to $63.83/oz. Aggressive closing of long positions by commercial hedgers is lowering risk levels as the dollar rallies against most currencies and crushes demand for the industrial commodity. Investors are refusing to touch the asset as it tries to settle after yesterday’s explosive consumer inflation print before it looks ahead to the May producer price index (PPI) report to be released by the Bureau of Labor Statistics on June 12, 2026, at 8:30 am ET.

The dominant fundamental risk for the silver price comes from the consumer price index (CPI) print released yesterday, which was 4.2% annualized in May, after the prior reading was only 3.8% annualized in April. Core CPI readings also came in at 4.1% year-on-year. The persistent increase in service sector expenses and ongoing supply-chain issues means inflationary pressures remain stubbornly high despite all consumer expectations of a rate cut.

De-Escalation Realities Dampen Safe-Haven Bids

Given the recent inflationary data, newly elected Federal Reserve chair Kevin Warsh, who took charge of the US central bank on May 22, is unlikely to cut interest rates at the June 16 to 17 FOMC meeting. Fixed income desks expect interest rates to remain high for extended periods and are hedging the risk of a potential interest rate hike in mid to late summer in order to contain inflation expectations and prevent them from becoming unanchored.

High interest rates support the US Dollar Index (DXY) and keep real US Treasury yields high, which is negative for non-yielding industrial commodities such as silver.

The long-term outlook remains more constructive despite the current selling pressure: The regional ceasefire in the Middle East, although not officially declared, has held for over ten weeks. Iranian rockets occasionally strike Israeli targets, and the truce remains fragile. However, shipping companies have been cautiously resuming transit of the Strait of Hormuz to 84% of their normal capacity. Investment desks continue to assume that the current geopolitical unrest in the Middle East will not result in a major supply disruption.

The global silver market has been in deficit for six consecutive years according to the Silver Institute. The Silver Institute estimates that 70% of the silver production comes from copper, zinc and lead mines. There’s no shortage of demand for silver. In the second half of this decade, silver is likely to remain an indispensable metal for the growth of high-efficiency solar photovoltaic systems (20% of demand for silver), electric vehicles, 5G networking infrastructure, and advanced electronic equipment in artificial intelligence data centers.

Silver (XAG/USD) Technical Analysis: Descending Channel Defends $61 Support Floor

A bearish continuation is still possible at this point, as price action on the four-hour chart remains within a very well defined descending channel, with silver at $63.83 after dropping below the high of $96.00/oz seen several months ago.

Long upper wicks on silver candlesticks imply a significant amount of overhead supply by macro funds and institutional hedgers, which is likely to keep intraday prices under pressure as long as they remain below the 50-period exponential moving average (EMA) of $69.18, and the 200-period EMA of $74.32. In the medium term, the silver price remains in a downtrend as long as it cannot close above the EMA50 level of $69/oz. The 14-period relative strength index (RSI) sits at 33.63, indicating that silver can move lower before it reaches a significant oversold reading on intraday charts.

There’s only minor positive divergence between the local bottom in the RSI and the local bottom in the silver price. Shorting intraday rallies with a defensive risk management stop loss at $66.90 could lead to a quick slide in the silver price toward the next local support level at $61.90/oz to $62.00/oz, as the next technical target remains at $58.07/oz in the descending channel on the 4-hour chart.

In short, silver has returned to macro fundamentals. While the underlying supply and demand dynamics are still in favor of the long-term silver investor, spot prices are heading lower until the May PPI reading is released at 8:30 am ET, according to the 4-hour technical outlook.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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