Bullish Scenario: CPI Weakens, Fed Rate Cuts Gain Traction

If today’s inflation data comes in softer than expected, the US dollar could decline, making silver more attractive to investors. A weaker CPI print would reinforce expectations for a June rate cut, which would lower Treasury yields and enhance silver’s appeal as a non-yielding asset.

A bullish reaction could drive silver through its recent high of $33.21, opening the door for a breakout above this year’s peak at $33.39. If momentum continues, the next upside targets are $34.87 and $35.40, which would represent a significant extension of silver’s uptrend.

Another potential catalyst for silver’s upside is escalating trade tensions. If investors grow concerned that tariffs will slow global growth, safe-haven demand for silver could increase, adding further bullish momentum.

Bearish Scenario: Inflation Stays Hot, Fed Holds Rates Steady

If CPI comes in stronger than expected, markets may begin to price in a longer period of restrictive Fed policy, strengthening the US dollar and bond yields—both negative for silver. A hot inflation reading would likely push expectations for rate cuts further into the year, reducing silver’s appeal.

In this case, silver could retreat toward key support levels. The first test will be $32.53, the 61.8% retracement level from the recent rally. A break below this could extend losses to $31.81, the 50% retracement level.

If selling pressure intensifies, silver may test its 50-day moving average at $31.42, with the 200-day moving average at $30.57 acting as a critical longer-term support zone. A break below these levels could shift the intermediate trend to neutral or bearish.