Tariff-Driven Pressures Stir Market Volatility
The U.S. average tariff rate surged from 2.5% to 25% earlier this year, now sitting near 14%. Economists at Goldman Sachs expect price pressures to surface in goods like apparel and electronics. Pantheon Macroeconomics called the expected boost in CPI “undeniable.” The tariff impact is also preventing the Fed from easing policy, according to Fed Chair Jerome Powell.
Three CPI Outcomes, Three Silver Paths
Scenario 1 – Hot CPI (Above 0.30%)
- Fed cut odds decline; real yields rise
• Dollar gains pressure silver
• Break below $35.28 opens path to $32.10
Scenario 2 – In-Line CPI (0.23%–0.30%)
- Silver likely consolidates near $38.40
• Support at $35.28 holds
• Traders shift focus toward $40.00
Scenario 3 – Soft CPI (Below 0.23%)
- Rate cut odds surge above 60%
• Dollar weakness lifts silver
• Breakout toward $40.00 and $44.10 possible
Dollar, Yields, and Technical Setup
Yields are moving higher — 10-year at 4.423%, 30-year at 4.961% — pricing in inflation risk. DXY remains capped unless it breaks above 98.88, limiting upside for the dollar. Silver’s bullish structure remains intact above $35.28, with the 52-week average well below at $32.10.
Outlook: CPI Print Will Set the Tone
With silver already trading above its breakout level from earlier this year, Tuesday’s CPI will determine whether it extends toward $40.00 or reverses. Ongoing industrial demand, a fifth consecutive annual deficit, and strong central bank gold buying create a solid backdrop. But short-term, it’s all about the number. Traders should be ready for a directional move off the release.
