#现货白银日涨5% Silver Market Outlook: Have the bearish factors been fully priced in, and could silver rebound?

On Thursday (June 11th) during the U.S. trading session, spot silver is quoted at $64.225, up 1.33%. Earlier this week, before the release of CPI and PPI data, silver prices had already fallen sharply, with traders pre-positioning for negative data. The CPI data released on Wednesday showed inflation exceeding 4%, and on Thursday, PPI data also significantly surpassed expectations, with the European Central Bank announcing a rate hike on the same day. This week, various bearish factors have continued to emerge.
On the day when all these bearish data were released collectively, silver not only stabilized but also slightly gained. When bearish expectations are fully realized but prices fail to continue falling, it indicates that the downward momentum has been exhausted. Thursday’s market movement is a clear signal of this.
Overall PPI data is relatively strong, but detailed indicators reveal potential turning points
In May, the Producer Price Index (PPI) rose 1.1% month-over-month, well above the expected 0.7%; wholesale prices increased by 6.5% year-over-year, reaching a new high since November 2022. From the overall data, inflation remains concerning, but some detailed indicators are less pessimistic.
Nearly 80% of the PPI increase was driven by a 2.8% surge in final demand goods prices, with energy products being the main driver: wholesale gasoline prices soared 23.4% in a single month, and overall energy costs rose 10.7% month-over-month. Tensions in Iran directly pushed energy prices higher, which also influenced the previously released CPI data.
Excluding food and energy, core PPI rose 0.4% month-over-month, below the market expectation of 0.5%. This indicator is particularly important for silver’s price movement, as it helps determine whether inflationary pressures are confined to energy sectors or have spread more broadly. Currently, inflation pressures are not widespread. Although headline inflation remains high, the core price increases are mainly concentrated in energy commodities like crude oil and gasoline, not due to excessive overall market demand.
CPI data confirms: the Federal Reserve is unlikely to cut interest rates in the short term
Wednesday’s CPI data showed U.S. inflation rose to 4.2% year-over-year, the highest in nearly three years; core prices increased only 0.2% month-over-month, with core inflation at 2.9% year-over-year. In this context, the Fed is unlikely to initiate rate cuts. Market consensus expects the Federal Open Market Committee (FOMC) to keep rates unchanged at next week’s meeting. Surveys indicate most economists believe the Fed will not cut rates for the rest of this year.
Market expectations for rate cuts have been completely dismissed, with some traders even betting on a possible rate hike by the Fed within the year. Generally, a high-inflation environment with sustained high interest rates is unfavorable for silver. Since silver does not generate interest income, rising U.S. Treasury yields make interest-bearing assets far more attractive than silver.
This week, silver prices had already declined ahead of the data releases. When bearish data were released as expected, prices stopped falling, indicating that rate-related bearish expectations had already been priced in by the market.
ECB rate hike, silver still holding its ground
The European Central Bank raised interest rates by 25 basis points on Thursday, with the deposit rate increasing to 2.25%, marking the first rate hike since 2023. Policymakers are concerned that inflation driven by energy prices could gradually spread across all goods and services. The market also anticipates further tightening of monetary policy by the ECB later this year.
The simultaneous tightening by two major central banks would, in theory, put downward pressure on silver: this would push up global bond yields and strengthen major currencies. As silver is a non-interest-bearing asset, it should be under pressure. However, the reality is that despite the hawkish stance of the Fed, the ECB’s rate hike, and the surge in PPI data, silver still rose on the same day. This is because the market had already priced in these bearish factors earlier in the week.
Technical analysis
On Thursday, silver prices oscillated slightly lower, showing signs of forming a bottom in the short term. (Spot silver daily chart Source: YiHuiTong)
Based on combined long- and short-term trend indicators, as well as the 50-day and 200-day moving averages, both the medium- and short-term trends are in a downtrend channel. The current trend direction is quite clear; we focus on support levels and whether the decline will continue.
Resistance levels
The first resistance is the 200-day moving average at $68.08. If prices successfully break through this level, short covering could push silver higher, with the next resistance zone formed by the 20-day moving average at $73.04 and the 50-day moving average at $75.54.
Support levels
The immediate short-term target for the decline is the recent low of $61.48, followed by the March 23 low of $60.96. The market’s key level previously targeted was the 50% retracement of the all-time high of $121.49, around $60.74, which aligns closely with $60.96.
Another critical support is $59.34, which previously acted as a breakout point on December 5 last year, triggering a significant rally from December to January. If this level is broken, silver could open up further downside, with the next strong support at the October 28 low of $45.55.
During rapid declines, it is not advisable to blindly bottom fish; instead, small positions can be taken around key previous levels like $61.00. In a long-term downtrend, the most reliable bottom signals are usually iconic reversal candlestick patterns.
Key points to watch in the future
This week, the market preemptively sold off silver to prepare for CPI and PPI data. Both sets of data show high inflation overall, but mainly driven by energy price increases caused by tensions in Iran. Core inflation data did not meet market expectations. The Fed has confirmed no rate cuts are planned, and the ECB has already raised rates. These bearish factors were largely priced in before the data was released.
After the bearish data was fully digested, silver reversed and closed higher, indicating that the selling pressure related to rate expectations has been exhausted.
From a technical perspective, MACD’s DIFF line remains below the DEA line, with the green histogram not yet significantly shrinking, suggesting downward momentum is still present; RSI is approaching oversold levels near 30, increasing the likelihood of a short-term technical rebound, but no clear bottom divergence or reversal signals have appeared.
Overall judgment: On the rebound path, $68.08 (the 200-day moving average) is the first critical test. If only short covering occurs, the rally will likely stall around the resistance zone of $73.04–$75.54; only substantial buying can sustain a further rise.
Downside, key levels to watch are $61.48 and $60.96. If these are broken, especially if $59.34 gives way, the decline will accelerate sharply, with the next strong support at $45.55.
This round of decline has already priced in bearish factors, and the price stabilized after the data was released, marking a typical bottoming process. Whether a definitive bottom can be established depends on next week’s FOMC meeting results and whether the Fed signals a more hawkish stance than market expectations.