Silver concluded yesterday’s trading session with an increase of 0.58%, reaching a level of 125,180. This upward movement was bolstered by the release of US producer price data that fell short of expectations. In August, both the headline and core Producer Price Index (PPI) experienced a decline of -0.1%, contrary to expectations of a 0.3% increase.
This unexpected downturn can be largely attributed to a significant reduction in margins within the machinery and vehicle wholesaling sectors. This development came on the heels of disappointing labor market data from the United States earlier in the month, thereby reinforcing market expectations for multiple rate cuts by the Federal Reserve within this year. The focus now turns to the consumer inflation report scheduled for Thursday, which is anticipated to provide additional guidance on policy direction. The persistent demand for safe-haven assets has played a crucial role in sustaining silver prices, particularly in the context of escalating geopolitical tensions.
Among the pivotal elements were President Donald Trump’s call for the European Union to consider imposing tariffs as high as 100% on China and India, utilizing this as a strategic maneuver against Russia. Additionally, the escalating turmoil in the Middle East and Poland’s successful interception of Russian drones amid a major offensive in Ukraine played crucial roles in shaping the geopolitical landscape. Investment interest exhibited robust momentum, with net inflows into silver ETPs increasing by 95 million ounces during the first half of 2025, thereby exceeding the total recorded for the entirety of 2024. As of the conclusion of June, the total holdings of global silver exchange-traded products (ETPs) reached 1.13 billion ounces, representing a mere 7% deficit from the historic high recorded in February 2021.
From a technical perspective, the market is currently experiencing short covering, as evidenced by a decline in open interest of -2.9%, which has settled at 17,163 lots. Silver currently finds support at 124,760, and should the downward pressure continue, a subsequent test of 124,345 appears probable. Resistance is identified at 125,590, and a sustained breach above this threshold may propel prices towards 126,005.