Silver prices are struggling to recover after a sharp rejection from the $38.75 level on Thursday, with the market currently hovering around the $38.00 mark. The recent pullback follows strong US Producer Price Index (PPI) data, which boosted the US Dollar and increased selling pressure on precious metals.
Market Impact: Strong US PPI Weighs on Silver
US producer prices in July recorded their fastest growth in three years, surpassing market expectations. This rise reinforced concerns that tariffs are fueling inflationary pressures, reducing expectations for imminent interest rate cuts by the Federal Reserve. As a result, the US Dollar strengthened, adding pressure on XAG/USD.
Technical Outlook: Trendline Break Signals Caution
From a technical standpoint, Silver’s sharp reversal from $38.75 has pushed prices below the ascending trendline support from late July. A bearish divergence in the 4-hour Relative Strength Index (RSI) further signals the potential for a deeper correction.
Current price action is holding just above Thursday’s low of $37.85, with the next downside targets seen at the August 12 low near $37.60 and the August 5 low around $37.30.
On the upside, the broken trendline — now acting as resistance near $38.10 — remains a key level for bulls to reclaim. A move above this point could shift momentum back towards the $38.40 intraday resistance and, eventually, Thursday’s $38.75 peak.
Stay Updated with Daily Gold Pakistan.