Silver Falls Sharply by Nearly 4%, Interrupting Its Recovery From the Lows as US Inflation Reinforces Expectations of a Fed Rate Hike

(MENAFN- MENAFNEditorial)
Silver ended’yesterday’s trading session, November 10, down nearly 4%, interrupting its recovery from the low near USD 48.5/oz established in early November. The decline took place alongside a rise in both the USD and Treasury yields. This shows that the recovery from the previous low remains fragile in the face of changes in monetary policy expectations.
The recently released US October CPI rose 0.4% month-on-month, above the forecast of 0.3%. Although lower th’n September’s increase of 0.6%, it still shows that price pressures have not eased as much as the market had hoped. The disadvantage for silver is that this data makes it harder for investors to expect the Fed to end its tightening cycle soon. This is because rising yields also increase the opportunity cost of holding silver, while a stronger USD reduces the appeal of precious metals to buyers using other currencies.
Yesterday’s decline therefore raises doubts about the sustainability of the recovery from the lows. The rebound shows that buying interest has emerged, but the strong reaction after the CPI release suggests that this buying interest is not yet firm enough to withstand unfavorable news on interest rates. On the other hand, caution is also needed because a single session of declines is not enough to conclude that silver will immediately return to its previous low; it is necessary to monitor whether pressure from the USD and yields continues over the coming sessions.
In the near term, I lean toward the possibility that silver will continue to fluctuate and remain under pressure, potentially consolidating within the USD 48.5–53.5/oz range, as the market needs time to reassess the interest rate outlook following the inflation data.
If the USD and yields continue to rise, the recovery could weaken further, and the risk of retesting the lows will increase. Conversely, if the reaction to CPI eases soon and Fed expectations do not continue to shift toward more aggressive action, silver still has a chance to stabilize.
To shift to a more positive view, we need to see prices retain their recovery gains over the coming sessions, alongside easing interest rate pressure, rather than just a single session of gains following a sharp decline.

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