Silver prices have faced intense selling pressure in recent sessions, marking three consecutive declines and pushing the metal to its lowest levels of the year. This downturn reflects a loss of market appeal, driven in part by the performance of the U.S. dollar and bond markets following the latest U.S. inflation data. The annual CPI came in at 3.7%, above expectations of 3.6%, while Core CPI rose 2.6% year-over-year, exceeding forecasts of 2.5%. These figures suggest inflation remains above the Federal Reserve's 2.0% target, strengthening expectations of higher interest rates and reducing silver's attractiveness as it lacks a direct yield.
The bond market and U.S. dollar have benefited from these expectations, with 10-year U.S. Treasury yields trading near 5.2% and the DXY index holding above 102. In contrast, silver has continued to weaken, indicating that competing assets are absorbing demand that would otherwise flow toward the precious metal. This dynamic has been particularly evident following the inflation release and could continue to limit silver's recovery in the short term.
The gold-to-silver ratio has also climbed toward 73, up from lows near 64 at the end of September. This ratio suggests that investors are favoring gold over silver, reflecting the latter's weaker relative performance. Even silver's industrial component has not been enough to stabilize demand, as market focus has shifted toward gold as the primary safe-haven metal. As long as this ratio continues to rise, selling pressure on silver could persist.
Technically, silver's bearish trendline remains relevant, with the MACD histogram below the neutral line and the RSI approaching the oversold zone. Key levels to watch include $62 as critical resistance, $58 as a near-term barrier, and $55 as critical support. A sustained move below $55 could reinforce the bearish bias and support further downtrend extension.