Silver experienced an increase of 1.5% yesterday, closing at 128,838. This rise was propelled by strong anticipations regarding a potential rate cut by the Federal Reserve in the upcoming week. Recent economic data from the United States has shown that consumer prices increased by 0.4% in August, representing the most rapid growth observed in seven months.
In contrast, producer prices experienced an unexpected decline earlier in the week. Jobless claims have risen by 27,000, reaching a total of 263,000, marking the highest level observed since 2021. This development indicates a notable weakness in the labor market. Current market expectations indicate approximately a 93% probability of a 25 basis point rate cut during the Federal Reserve’s meeting on September 17, alongside increasing likelihood for a more substantial half-point reduction. The demand for safe-haven assets has been further bolstered for silver, particularly in the context of persistent geopolitical tensions. In the industrial sector, strong demand stemming from solar energy, electric vehicles, and electronics has led to a tightening in the physical silver market, all while supply constraints continue to persist.
The University of Michigan’s consumer sentiment index experienced a decline, registering at 55.4 in September 2025, a decrease from the previous month’s figure of 58.2 in August. This drop fell short of expectations and indicates an increasing apprehension regarding business conditions, employment prospects, and inflationary pressures. Investment demand exhibited robust strength, with net inflows into silver ETPs reaching an impressive 95 million ounces during the first half of 2025, thereby exceeding the total inflows recorded for the entirety of 2024.
From a technical perspective, the market is experiencing new buying activity, evidenced by an increase in open interest of 0.69%, bringing the total to 18,712 contracts. Silver is presently underpinned at 127,830, with the potential for a subsequent examination of 126,820 should bearish pressure continue to exert itself. On the upside, resistance is anticipated at 129,620, and a breach above this threshold could aim for 130,400.