SILVER Round-Trips From $90 to $77 as CPI and PPI Price Out 2026 Fed Cuts

The Inflation Double-Hit

The selloff is a clean macro trade. April CPI printed at 3.8% year over year on May 13, the hottest reading since May 2023, with the seasonally adjusted monthly headline at 0.6%. Wednesday's PPI then reaccelerated, and ANZ analysts told Yahoo Finance that the combined producer and consumer prints "raised concerns that the Fed may need to increase interest rates in the short term." That repricing is doing the damage: June cut odds collapsed under 8%, the first cut pushed to September at the earliest, and the dollar index sits near 99. Silver carries both an industrial demand bid and a monetary hedge bid, so a hawkish dollar move hits both engines at once. Gold dropping just over 3% to roughly $4,542 while silver lost more than 10% to $76.69 — Fortune marked spot at $77.52 by 8:45 a.m. ET — is the textbook print of that asymmetry.

The Setup Coming In

This was not a bolt from the blue. The structural-shortage thesis that powered silver into the high-$80s had already been quietly dismantled. On April 30, UBS cut every leg of its silver curve: June-end from $100 to $85, September from $95 to $85, December from $85 to $80, and March 2027 from $85 to $75. More importantly, the bank slashed its 2026 supply deficit estimate from roughly 300 million ounces to 60–70 million ounces — an 80% revision against the entire silver-squeeze narrative. UBS cited weaker investment demand, softer industrial consumption, and higher mine supply, with photovoltaic and jewelry demand alone expected to drop by about 50 million ounces. Wednesday's spike toward $90 ran the price right into that downgraded view; Thursday's CPI/PPI combo gave the macro side an excuse to mark silver back to where the fundamentals already lived.

What Breaks Next

The HIP-3 perp is now trading at $76.38 with $397M in 24h volume, sitting just above UBS's March 2027 anchor at $75. That level is the next obvious decision point — losing it cleanly would mean spot is leading the bank's bearish curve rather than catching down to it. The bigger overhang is the gold-silver ratio: with gold sticky above $4,500 and silver giving back two months of work in two days, the ratio is finally widening from compressed levels and could keep going if the dollar stays bid into next week's data. The bull case requires either a soft PCE print to revive the Fed-cut trade or a Middle East flare-up to put a safe-haven floor back under both metals. Until one of those shows up, silver is a directional dollar trade, and the dollar is winning.