Silver Faces Potential Pullback as CPI Rally Plateaus

Silver traders face a mixed picture following the recent CPI surge, which propelled a sharp rally in silver. The Elliott Wave Forecast suggests that XAG/USD may head lower, with buyers holding up on the move.

According to analyst Elliottwave, the current price of $63.41 indicates more downward movement towards $58-$60. The chart shows several Elliott Wave labels indicating the potential corrective path and a lower structure in preparation for a potential recovery.

The overall chart setup indicates that traders need to be aware of the $60 zone. If it declines below this level, the next support area around $58 would be in view. However, the chart also indicates a possible bounce-off and bounce-back above the correction, with silver ultimately returning towards the $66 level.

The CPI rally has changed the short-term momentum, with more than $740 billion flowing into core CPI gold and silver exposure in just 30 minutes since the monthly data was released. The inflation report also raised pressure on the Fed to tighten policy, providing a conflicting background for non-yielding metals.