Silver climbed above $66 per ounce on Wednesday, gaining around 2.5% to 3% as precious metals strengthened ahead of fresh US inflation data. Spot silver traded near $66.5, extending a strong monthly advance while investors weighed Middle East tensions, interest-rate expectations, and industrial demand.

In this article, experts at Kepler Group examine whether silver can extend its move toward $70 or whether stretched momentum could trigger a pullback toward $64.

Silver Extends Its August Rally

Silver has gained sharply during recent weeks. Current prices are around 15% higher than one month ago, while the latest rise also outpaced gold.

Silver’s stronger performance reflects its unusual position as both a precious metal and an industrial commodity.

Safe-haven demand can support prices during periods of geopolitical uncertainty, while manufacturing and energy-transition demand provide a second source of interest.

US Inflation Is the Immediate Market Focus

Investors are watching the latest US consumer price report closely.

July CPI is expected to increase by around 0.1% month over month, with annual inflation forecast near 3.4%.

A softer inflation reading could provide another boost for silver by reducing pressure on US yields and the dollar.

Stronger inflation would be less supportive because higher interest rates increase the opportunity cost of holding non-yielding precious metals.

Bollinger Bands Show Rising Volatility

The first chart places silver inside 20-period Bollinger Bands.

These bands expand when volatility rises and contract when price movement becomes quieter.

Silver has pushed toward the upper band following its latest advance.

Trading near the upper boundary confirms strong momentum, although it also shows that the market has moved well above its recent average.

A continued close near or above the upper band would support another move higher. A retreat toward the central moving average would suggest the rally is cooling.

Image 1: Silver Candlestick Chart With Bollinger Bands

Resistance Begins Around $68

The first important resistance area is positioned near $68 per ounce.

A sustained move above this level could expose $70, followed by $72.

A daily close above $70 would provide stronger evidence that the current rally has enough momentum to continue.

That outcome would become more likely if inflation comes in below expectations, the dollar weakens, or geopolitical uncertainty increases.

Support Appears Near $64

Initial support is located around $64.

The metal traded near $65 during the previous session before Wednesday’s rebound, making the $64 to $65 region an important near-term area.

A break below $64 could expose $62, followed by $60.

A sustained decline beneath $62 would suggest that the current upward move is losing its short-term structure.

Buyers may still view pullbacks as attractive while broader precious-metal demand remains firm.

The CCI Shows Strong Momentum

The second chart uses the Commodity Channel Index, or CCI.

The indicator compares current prices with their recent average. Readings above +100 generally indicate strong positive momentum, while readings below -100 suggest heavy selling pressure.

The CCI is elevated, confirming that silver remains firmly in a bullish momentum phase.

That strength supports another challenge of $68 and $70, but very high readings can also indicate that the market has become temporarily stretched.

A fall back through +100 would provide an early sign that momentum is cooling.

Image 2: Silver Four-Hour Chart With Commodity Channel Index

Geopolitical Risk Supports Safe-Haven Demand

Precious metals continue to benefit from uncertainty surrounding the Middle East.

Oil prices remain elevated, while shipping and diplomatic developments continue to influence broader risk sentiment.

Persistent geopolitical uncertainty can increase demand for silver alongside gold, especially when investors become more cautious about equities or currencies.

The effect is not always straightforward because rising oil prices can also increase inflation expectations and push bond yields higher.

Industrial Demand Remains Important

Silver differs from gold because a substantial share of demand comes from industry.

The metal is widely used in electronics, solar technology, electrical equipment, and manufacturing.

That industrial role can support prices when manufacturing expectations improve, but it also creates downside risk during economic slowdowns.

Tight inventories and strong investment demand can further amplify price moves when supply becomes constrained.

Trading Implications

Silver retains a bullish short-term outlook while trading above $64.

A confirmed break above $68 could expose $70 and $72.

A decline below $64 would weaken immediate momentum, while a sustained break beneath $62 could shift attention toward $60.

Softer US inflation, a weaker dollar, geopolitical uncertainty, and stronger industrial demand would favor higher prices.

Higher yields, a stronger dollar, or weaker manufacturing activity would increase the risk of a correction.

Conclusion

Silver is trading above $66 as safe-haven demand and inflation expectations combine with a strong technical trend.

Resistance is positioned near $68, $70, and $72. Support can be found around $64, $62, and $60.

Momentum remains firmly positive, but silver is approaching levels where volatility and profit-taking could increase quickly.