Silver fell 6.29% on Wednesday, October 14, to $55.74, the metal's lowest daily close of 2026. Hot US inflation data revived expectations of a Federal Reserve rate hike. Silver's decline was nearly six times as large as gold's decline. The intraday low of $55.39 left silver 54.5% below the January 29 record of $121.64. Silver rebounded 2% on Thursday.
The Bureau of Labor Statistics reported that September's Consumer Price Index rose 3.7% year-on-year, above the 3.6% forecast. Gasoline prices alone jumped 9.1% in a month as Brent crude held above $100. Motilal Oswal analyst Manav Modi said the inflation reading briefly lifted the 10-year Treasury yield above 5.3%. The dollar index, DXY, neared an 18-month high. Consequently, CME FedWatch odds of a rate hike at the October 27-28 meeting briefly exceeded 50% before settling near one-third.
More than half of silver demand is industrial, so silver trades like a risk asset. Silver fell as the Nasdaq dropped 1.9%, pushing the gold-to-silver ratio to a 2026 high of 73.8. Spreadex said silver's loss of $58.50 support triggered stop-loss selling. The stop-loss selling turned a steady decline into a sharp drop.
Silver has formed lower highs and lower lows on the daily chart since the January peak. The latest lower high formed on August 28, near $70. However, silver remains above the 0.786 Fibonacci retracement at $54.5. Traders use Fibonacci retracement levels to assess pullbacks, and the $54.5 level matches the late-2025 highs. A daily close below $54.5 would confirm a fresh lower low and extend the bearish trend. The $50 level could become relevant if silver closes below $54.5.
The 0.618 Fibonacci level near $68.9 anchors a resistance zone of $66 to $69. Silver also trades below the 50-day moving average near $64. The Relative Strength Index, a momentum gauge, dipped close to oversold territory before rebounding to 36. The rebound suggests sellers may be tiring. However, the broader trend remains bearish.
Thursday's Producer Price Index data indicates that inflation concerns persist. Federal Reserve Chair Kevin Warsh speaks on Friday, ahead of the October 27-28 Federal Open Market Committee meeting. Polymarket traders assigned a 61.5% probability on Wednesday evening that silver touches $54 in October. Silver currently trades less on industrial demand than on how far the Federal Reserve will raise rates. Holding $54.5 would support the case that silver is a bargain. A break below $54.5 would instead suggest a value trap.
Silver Price Hits 2026 Low Amid Inflation Fears and Fed Rate Hike Speculation
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Summary
Silver dropped 6.29% on October 14 to $55.74, its weakest close of 2026, as fresh inflation data and Fed news fueled expectations of a rate hike. The metal hit an intraday low of $55.39, 54.5% below its January 29 peak of $121.64. Silver recovered 2% the next day.
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