Silver (XAG/USD) experienced a sharp decline on Thursday, erasing Wednesday's gains and falling over 5.30% to trade at $63.72. This drop was triggered by the formation of a bearish head-and-shoulders chart pattern, with the price breaking a key support trendline around $64.00–$64.15 and exacerbating the decline below $63.50 [1]. The move followed the release of a hot US Producer Price Index (PPI) report, which pushed US bond yields higher, strengthened the US Dollar, and increased the likelihood of a Federal Reserve rate hike at the upcoming meeting [1].
Technically, silver tumbled more than $3.60 and cleared the head-and-shoulders neckline, though a daily close below this level is needed to confirm the bearish pattern. If confirmed, the next support levels are identified at $60.00 and the head-and-shoulders target near $55.00 [1]. On the upside, resistance is seen at $70.00, with further potential to reach the 200-day SMA at $73.00 and possibly $75.00 if bullish momentum returns [1].
The article notes that a softer Consumer Price Index (CPI) reading on Friday could keep the Fed meeting outcome uncertain, while higher inflation data would reinforce a hawkish stance [1]. The technical breakdown and macroeconomic backdrop suggest heightened volatility and downside risk for silver in the near term [1].
CONCLUSION
Silver's price has come under significant pressure due to bearish technical signals and stronger-than-expected US inflation data, raising the prospect of further declines if support levels are breached. The market is closely watching upcoming CPI data and the Federal Reserve's next move, which could further influence silver's trajectory.