Silver has rebounded 1.3% to $64.396 per troy ounce, clawing back from a three-week low as traders bought the dip before Friday's US inflation report. The bounce rests on safe-haven demand tied to US-Iran tensions and a structural supply deficit, but analysts say the bearish technical setup could limit further gains.
Silver climbed 1.3% to $64.396 per troy ounce on Friday, rebounding from an intraday low of $62.9965 that marked its weakest level in over three weeks. Traders bought the dip ahead of the US August Consumer Price Index report, the final major inflation print before the Federal Reserve's September 15-16 policy meeting.
Producer prices sparked Thursday's selloff
The rebound follows a sharp drop on Thursday, when US producer prices accelerated in August as energy costs rose on the Iran conflict. That print pushed markets to price in roughly a 71% probability of a 25-basis-point Fed rate increase next week, a significant jump from the day before. As a yieldless asset, silver tends to rise when interest rates fall, and its price also moves inversely with the US dollar.
Safe-haven demand and a supply deficit underpin the bounce
US-Iran tensions near the Strait of Hormuz have kept safe-haven demand elevated, even as mixed signals from Tehran about a possible safe shipping route add fresh uncertainty. Meanwhile, the Silver Institute has confirmed a fifth consecutive annual supply deficit through 2025, with a sixth deficit forecast, though not yet confirmed, for 2026. That structural gap underpins the metal's longer-term support.
Upside looks capped before CPI
Silver rebounded from the $63.00 mark it touched earlier on Friday, but analysts note that upside potential appears limited as traders await the US inflation figures. The bearish technical setup suggests the recovery attempt may be sold into.
Broader US equity markets provided a constructive backdrop, with the S&P 500, Dow Jones, and Nasdaq all posting gains of approximately 1.0% or more during the session. Traders now turn to the Fed's September 16 rate decision for the next move in silver.
Source: Commodities & Futures News
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