Silver Probes 2026 Lows After Hot US CPI

Silver suffered its biggest one-day drop since June on Wednesday, sliding more than 6% after a hotter-than-expected US inflation report.

The sell-off dragged the metal to its lowest close of the year, just below July's trough, and wiped out the whole of its August rally. With Fed hike bets rising, the dollar at an 18-month high and a fresh wobble in AI stocks, silver was hit from almost every angle.

Latest Market Moves

•        Silver dropped more than 6% on Wednesday to close near $55.90 an ounce, its lowest close of 2026.

•        Gold futures fell 1.4% to $4,127 on Wednesday, their lowest close since 5 August, while the gold/silver ratio climbed around 5% in the same session to a 2026 high near 73.8.

•        The US dollar index rose as much as 0.5% to around 102.70 after Wednesday's CPI release, its strongest level in 18 months.

•        The Nasdaq Composite slid 1.9% and Bitcoin fell more than 2% in Wednesday's session as AI infrastructure stocks led a broad risk-off move.

Hot CPI Revives Fed Hike Bets

US consumer prices rose 3.7% in the year to September, up from 3.4% in August and above forecasts of 3.6%.

Fuel did much of the damage, with gasoline prices jumping 9.1% on the month as tensions around the Strait of Hormuz kept Brent crude above $100 a barrel. Core inflation, which strips out food and energy, also beat expectations at 2.6% year on year.

Traders rushed to price in another hike, with the odds of a move at the Fed's 27-28 October meeting briefly topping 50% on the CME FedWatch tool before settling around a third. San Francisco Fed President Mary Daly said more rate hikes are likely, although the timing should be deliberate.

Higher-for-longer rates are a headwind for precious metals, which pay no interest, and a tailwind for the dollar. The US dollar index hit its highest level since April 2025, making dollar-priced metals more expensive for overseas buyers.

AI Sell-Off Spills Into Silver

The CPI shock landed on a stock market that was already nervous about the cost of the AI build-out.

CoreWeave sank more than 15% and Oracle almost 9% after Gartner warned that most so-called neocloud providers may not survive to 2030, with higher rate expectations adding to worries over their heavy borrowing. CoreWeave CEO Michael Intrator told staff the market was acting "irrationally", according to Bloomberg.

Silver tends to trade more like a risk asset than gold, with more than half of its demand coming from industrial uses such as electronics and solar panels. That left it exposed as investors pulled back from growth-sensitive assets, with tech stocks, crypto and silver all falling together on Wednesday.

Silver Lags Badly Behind Gold

Gold fell too, but nowhere near as hard.

Silver's sharper slide pushed the gold/silver ratio to its highest level of the year near 73.8, up from below 55 in late May. That shows how quickly silver's speculative premium has drained away as the macro backdrop has turned against it.

There is little let-up on the calendar, with US PPI and retail sales data due on Thursday and Fed Chair Kevin Warsh speaking at the IMF and World Bank meetings later this week. Any further sign of sticky inflation would keep October hike bets alive and the pressure on silver.

Silver Tests Major Support

On the daily chart, silver is testing a major support zone between roughly $55 and $56 that has held since late June.

The metal has fallen almost 20% from its late-August high near $69.50, extending a downtrend that began at January's record above $115. Wednesday's break below short-term support around $58.50 accelerated the selling.

RSI dipped to around 30 on Wednesday, its most oversold reading since late June, which is when this support zone last sparked a rebound. A daily close below $55 would open the way towards $53 and then the psychological $50 level, while bulls would need to reclaim $58.50 and then $60 to ease the pressure.

Source: SpreadEx | Silver, Daily Chart