Silver (XAG/USD) advanced sharply this week, with prices rallying in the wake of the latest US inflation data and renewed bullish momentum. As of Friday, silver was trading around $64.43, up 1.4% from previous levels, following a strong jump sparked by the latest Consumer Price Index (CPI) report.
Elliott Wave analysis signals downside risk before recovery
Analysts from Elliott Wave Forecast, a technical analysis firm, have identified a corrective structure in the four-hour chart for silver. The current setup suggests the metal may experience further short-term declines before buyers step back in, targeting a new move upward.
According to Elliott Wave’s analysis, XAG/USD is now hovering near $63.41 and could fall toward the $58–$60 range. This area is seen as a key support zone where buying interest may start to rebuild. The correction could pave the way for a second leg higher with the potential for silver to rebound toward $66.
Silver’s next move depends on how it interacts with the $60 correction zone, which could either attract new buyers or set up for further losses toward $58 before any recovery attempt toward $66.
If XAG/USD drops below $60, analysts note that $58 will likely become the next major support. Conversely, a successful defense could trigger a bounce back toward earlier resistance levels.
Mini dictionary: Elliott Wave Forecast is a technical analysis methodology that uses price wave patterns to predict future market moves. Professional analysts often apply Elliott Wave theory when forecasting trends in financial markets such as metals, stocks, and cryptocurrencies.
US inflation data drives market volatility
Silver prices and other precious metals surged immediately after the release of lower-than-expected inflation data in the US. Another analyst, Bull Theory, reported that over $740 billion flowed into CPI-sensitive gold and silver assets within 30 minutes following the data. The report marked the lowest annual core CPI figure in 66 months, as August core CPI dipped to 2.4% from July’s 2.5%.
Even as the drop in inflation boosted metals initially, analysts argue that it could also prompt the US Federal Reserve to consider tighter policy, creating uncertainty for the non-yielding silver market.
| Item | Previous | Current | Timeframe/Reference |
|---|---|---|---|
| Core CPI (Annual, US) | 2.5% | 2.4% | August vs July |
| XAG/USD Price | $63.8 | $65.0 | Post-inflation release |
| Inflows to metals | – | $740 billion | 30 minutes post-data |
Traders remain cautious, as the rally above $65 could challenge the bearish scenario mapped out by Elliott Wave, while failure to sustain gains near this level may result in a renewed pullback toward $60 or lower.
Silver’s direction now hinges on whether prices can stay above the $65–$66 band following the CPI-driven surge, or if a correction toward the $60–$58 support areas will unfold in the days ahead.
Bulls maintain momentum with eyes on key resistance
Currently, silver futures are trading near $65.70, representing a gain of 1.19%. The ongoing buying strength has pushed prices to recent highs, even as silver miners have faced a challenging week.
The metal has broken above its previous trading range of $64.20–$64.40 and is now targeting the $66 resistance zone. Market observers suggest that holding above $65.70 could set up a move toward $66. A breakout beyond that level would leave room for an advance to $66.50, while a rejection could see prices test support at $65 and possibly the $64.60 area.
For now, buyers are driving momentum, with charts displaying a strong vertical move. The current structure signals that the silver market’s short-term trend remains upward as long as support zones remain intact.
