Silver Claws Back Ground as Traders Eye Fed Verdict and PCE Print

Silver futures found firmer footing in Asian trading on Monday, steadying after last week's heavy selling as a softer US dollar and easing rate jitters offered temporary relief. The front-month COMEX contract had closed out Friday at $57.13 an ounce, a modest step down from the prior session's $56.995 settlement.

The rebound follows a bruising stretch triggered by unexpectedly hot US inflation data. On October 14, the Bureau of Labor Statistics reported that the US consumer price index climbed 0.6% in September on a seasonally adjusted basis and 3.7% year-on-year, with the core rate up 0.3% month-on-month and 2.6% annually. Futures markets read the figures as a signal that the Federal Reserve may keep policy tighter for longer, and silver buckled under the weight. The October-delivery COMEX contract settled at $55.55 that day — the lowest daily close of the year in the relevant series.

Producer Prices Add to the Pressure

The inflation picture looks even starker further up the pipeline. Producer prices ran 6.3% above their year-earlier level, reinforcing fears that price pressures are proving stubborn. For a metal that pays no yield, that backdrop is a stiff headwind: fixed-income assets stay attractive when rates remain elevated. Geopolitical flare-ups and rising crude oil prices have added to the nervousness, stoking worries of a fresh inflation surge.

Institutional money has taken note. According to the latest CFTC report, speculative financial investors trimmed their net-long positions in the futures market — a retreat that mirrors mounting unease over the path of US interest rates, which has kept the precious metals complex on edge for weeks.

A Structural Floor Beneath the Market

Yet the sell-off has met countervailing forces. Intermittent dollar weakness and demand for hard assets have cushioned deeper pullbacks, and industry watchers point to a supply picture that remains tight. The Silver Institute, working with Metals Focus in this year's World Silver Survey 2026, projects a global supply deficit of 46.3 million ounces for the current year, up from 40.3 million ounces in 2025 — the sixth consecutive year of shortfall. Industrial demand tied to the build-out of future-facing technologies such as artificial intelligence underpins that gap, though muted economic prospects and talk of industrial material substitution pull in the other direction.

Even so, macro rate expectations have dominated the tape of late. Silver is down 19% since the start of the year.

Calendar Holds the Key

Attention now swings to Washington, where the Federal Reserve's Open Market Committee meets on October 27 and 28, with the rate decision due on Wednesday, October 28. The following day brings the September PCE price index — the inflation gauge the central bank watches most closely. Those two markers are likely to determine whether futures speculators hold their cautious line or shift course. Until then, the market stays vulnerable to currency swings and shifting rate bets. The next reading on US inflation lands on November 10, when the Labor Department publishes the October CPI.