Silver rose for a third day and traded near $91.39, up almost 3%, after US inflation data and trade uncertainty lifted demand for the metal. The US Dollar stayed firm during the move.
US Producer Price Index (PPI) data for January came in above expectations, suggesting inflation pressures may pick up in coming months. Headline PPI eased from 3% to 2.9% year on year, above the 2.6% forecast.
Inflation Data Lifts Silver Demand
Core PPI rose to 3.6% year on year, compared with 3% previously and a 3.3% expectation. Services prices contributed a 0.8% rise, with trade services up 2.5%.
Margins for professional and commercial equipment increased 14.4%, pointing to tariff-related costs moving through supply chains. The US began collecting 10% tariffs since Tuesday under Section 122, with some duties set to rise to 15%.
Silver was on track for nearly 10% gains for the month amid tariff uncertainty and stalled US-Iran nuclear talks. The US authorised some embassy staff and families to leave Israel due to security risks.
Technical levels cited included support around the $84–85 moving-average area and resistance just above $96, with $100 noted as a psychological level.
Market Strategy And Positioning
The January producer price data confirms that inflation is not cooling as hoped, making silver’s move above $91 an important signal for the coming weeks. The primary driver is clearly tariffs passing through to business costs, which suggests this inflationary pressure will be sticky. We believe traders should be positioned for continued upside momentum as the market digests this new reality.
We are seeing significant capital rotation into silver, with exchange-traded funds absorbing over $2 billion in net inflows just this month. The latest commitment of traders report also shows managed money has aggressively increased its net long position, betting on further upside. This influx of capital provides strong support for the current price rally.
The escalating situation between the US and Iran introduces significant weekend risk, making long volatility plays attractive. We think traders should consider purchasing short-dated call options to capitalize on any potential price spike if tensions boil over. This geopolitical uncertainty provides a strong floor for silver prices, independent of the inflation data.
After the range-bound trading we saw for much of the second half of 2025, this breakout is a major technical development. The market had previously priced in a more dovish central bank, but the new tariff regime is clearly overriding that narrative. This is not the same environment we traded in last year, and strategies must adapt.
With the price holding firmly above the $84-$85 support level, selling cash-secured puts or bull put spreads below this zone offers a way to collect premium while defining risk. On the upside, the path to the psychological $100 mark looks increasingly clear. We believe buying call spreads targeting the $96-$100 range in the coming weeks is a viable strategy.
The fact that silver is rallying alongside a firm US Dollar is telling. Usually, this would be a headwind, but the current move is being driven by powerful safe-haven demand and inflation hedging. This decoupling from its typical correlation suggests the underlying bid for hard assets is exceptionally strong right now.
