Silver Stalls Near 13-Year Highs: Trade Talks, CPI Data Hold the Key

Silver prices (XAG/USD) have hit a speed bump after a meteoric rise to 13-year highs near $37.00, now hovering around $36.00, down -1.29% on the day, as markets digest easing US-China trade tensions and await critical US inflation data. The white metal’s recent surge, driven by safe-haven demand and industrial appetite, faces a test as global economic signals shift. Can silver maintain its shine, or will it fade under new pressures?

Trade Talks Ease, Silver Slips

The announcement of a US-China trade deal framework on June 11, 2025, led by US Commerce Secretary Howard Lutnick, sparked a pullback in silver prices. After peaking near $37.00, XAG/USD retreated to $36.50 as the US Dollar strengthened and trade jitters softened. The agreement, pending approval from President Donald Trump and President Xi Jinping, aims to lift China’s export curbs on rare earth minerals, potentially stabilizing supply chains. This progress has reduced silver’s safe-haven appeal, with prices slipping 0.79% in a single session, reflecting a market recalibrating after overbought conditions.

Inflation Data Factor

Investors are now laser-focused on the US Consumer Price Index (CPI) data for May, released on June 11, which showed inflation cooling to 2.4% year-over-year, below the expected 2.5%. This softer print has bolstered expectations for Federal Reserve rate cuts in September, a tailwind for silver as lower interest rates reduce the cost of holding non-yielding assets. However, the upcoming Producer Price Index (PPI) and jobs data could complicate the outlook. Rising input costs, as noted in recent ISM surveys, suggest inflationary pressures may linger, potentially capping silver’s upside if the Fed delays easing.

Industrial Demand and Supply Squeeze

Silver’s rally isn’t just about safe-haven flows. Industrial demand, particularly for solar panels, has been a key driver. The Silver Institute reported a 15% supply deficit in 2024, with another shortfall projected for 2025, tightening the market and supporting prices. Despite this, JP Morgan warns of near-term headwinds due to industrial demand uncertainty, forecasting a “catch-up” to $39.00 per ounce by year-end. This tension between supply constraints and economic uncertainty keeps silver’s path volatile.

What’s Next for Silver?

Silver’s technical outlook remains bullish but cautious. After hitting $36.89, a 13-year high, XAG/USD is consolidating around $36.50. A break above $37.00 could target $38.00, unseen since 2011, but overbought RSI signals suggest a potential pullback to $35.90 or $35.60 if momentum fades.

With US-China trade talks progressing and inflation data shaping Fed policy, silver’s trajectory hangs in the balance. Investors should brace for volatility, as economic data and geopolitical shifts could either propel silver to new heights or trigger a deeper correction. The white metal’s shine depends on how these forces unfold.