Silver traded near $68 on Tuesday after its latest rally stalled, highlighting fresh uncertainty for the precious metal as investors gauge the outlook for U.S. inflation and Federal Reserve policy. The metal has found structural support from an ongoing supply deficit but faces new headwinds as major financial institutions turn more cautious.
Markets Await U.S. Inflation Data and Fed Comments
Spot silver slipped 1.3% to $68.01 an ounce in early trading, while gold also retreated. The moves came as traders focused on upcoming U.S. inflation numbers and a widely anticipated Jackson Hole speech by Federal Reserve Chair Kevin Warsh. Both gold and silver had benefited from a weaker U.S. dollar and falling long-term Treasury yields, but persistent inflation could keep interest rate expectations elevated. That scenario typically puts pressure on non-yielding assets such as silver.
J.P. Morgan Global Research revised its outlook for the metal, lowering its fourth-quarter 2026 forecast to $63 an ounce and projecting a full-year average of approximately $70. Analysts at the bank pointed to cooling physical tightness, weaker industrial demand in some sectors, and the possibility of higher global rates as key reasons for the downgrade.
Supply has offered some support amid this uncertainty. The Silver Institute, a key non-profit industry research group, reported a market deficit of 40.3 million ounces for 2026, representing the fifth straight year of a global shortfall.
Mini dictionary: The Silver Institute, founded in 1971, is a leading association dedicated to providing industry research and statistics on global silver supply and demand.
Technical Picture: Resistance and Support in Focus
Analysis from Eagle Pips Pro, a market charting and education service, showed that silver is attempting to rebound after a sharp pullback, but it remains capped by a key resistance zone near $68.38. This area is seen as a technical barrier that could determine whether the bounce continues or if selling pressure returns.
According to Eagle Pips Pro, the main reaction zone for XAG/USD is around $68.38, and silver traded close to $68.04 at the time of their analysis. Their scenario calls for prices to test this resistance before any renewed downward move, rather than immediately extending the recent drop.
Analysis highlighted that a rejection of $68.38 to $68.51 could maintain the bearish short-term outlook and draw attention back to the $66.96 area as a possible target.
If silver fails to break above $68.51 decisively, the downtrend could strengthen. On the other hand, a clear move above that level would signal that buyers are regaining control and could aim for the psychologically significant $70 mark.
The broader futures market provides a more balanced perspective. COMEX silver futures recently traded at $68.04, keeping prices above the 50-week exponential moving average (EMA) of $63.93. This medium-term indicator remains a key reference point for trend watchers.
| Key Level | Status |
|---|---|
| $68.38 (Resistance) | Price struggles to break above |
| $66.96 (Target) | In focus if resistance holds |
| $63.93 (50-week EMA) | Major long-term support |
| $63 (JPMorgan Q4 forecast) | Potential downside scenario |
| $70 (Psychological level) | Upside target if bulls reclaim resistance |
Technical momentum has started improving, with the weekly relative strength index (RSI) at 51.1, slightly above the midpoint after recent weakness. However, RSI levels do not yet signal the strength seen in sustained bullish breakouts.
Outlook Remains Divided Amid Mid-$60s Support
The proximity of major price levels has left silver at a crossroads. The 50-week EMA of $63.93 nearly matches JPMorgan’s lowered fourth-quarter forecast, highlighting the risk that a breakdown below this key support could trigger a deeper correction.
Holding above $70 would indicate a stronger recovery, while further resistance near $68.38 to $68.51 and robust support in the mid-$60s suggest the next breakout will be pivotal for the broader trend.
For now, silver is trapped between near-term resistance and longer-term support zones, as macro policy and inflation data loom large over short-term direction.
