Silver at $86.75 Surges 0.45% as Deficit Deepens – Rate-Cut Hopes Fade After Hot CPI?

Quick overview

Spot silver (XAG/USD) is hovering around $86.75 per ounce as of the morning trading session on May 13, 2026, climbing approximately 0.45% for the day as it digests slightly warmer U.S. inflation readings.

Today’s catalysts

• Higher than anticipated April CPI figures: CPI inflation came in at 0.6% MoM, 3.8% YoY, the strongest year-on-year rate seen in nearly three years. Core inflation was also hotter than anticipated, which dampened near term interest rate cut bets and pressured precious metals.
• Ongoing deficit conditions in the silver market: Silver is projected to post its sixth straight annual deficit in 2026, standing at 46.3 million ounces, per the Silver Institute. From above ground inventories, stocks have already been reduced by 762 million+ ounces since 2021, leaving current inventory levels alarmingly thin.
• Robust industrial demand: The market is being underpinned by consumption requirements from solar PV, electronics, electric vehicles, AI and 5G. China’s imports have only helped to squeeze the market.
• Silver’s unique dual advantage: Unlike gold, silver also acts as a monetary asset alongside its utility as a necessary industrial metal, which gives it a certain amount of upside to play as manufacturing sentiment recovers and green energy tailwinds strengthen.

Silver (XAG/USD) Technical Analysis

Chart-wise, silver punched a decisive 2H high in May, closing through the 0.236 Fib retracement ($85.34) and over the top boundary of the ascending black channel formed by early May price action from around $76.92, and is now moving along that channel higher from the lower boundary (the purple moving average), maintaining higher lows.

We also see the yellow/cyan moving averages pointing higher, with both providing support at $84.15, $85.33 as the price consolidates there. RSI climbed to the 65 level in May and is showing a healthy divergence on dips, meaning it’s well positioned to keep the bullish trend before being overbought. Resistance lies at $87.25 followed by $88.70 and $90.15.

Key Levels

Resistance: $87.25, $88.70, $90.15 Support: $85.33, $84.15

Trade Idea

Take buys above $87 targeting the $88.70, $90.15 area, place stop losses below $85.33. Silver is very tied to the U.S. inflation numbers as well as industrial demand and risk sentiment. While the rate cut outlook has been tempered for the time being, silver’s fundamental deficits and potential to be a crucial green metal in the near-future remains bullish on longer term timeframes.

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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