Silver traders are in a wait-and-see mode ahead of Wednesday's Consumer Price Index and Thursday's Producer Price Index releases, which will provide the next major catalyst for the Federal Reserve policy outlook. Markets have aggressively repriced rate expectations: a December quarter-point hike is now assigned a 70% probability, up from 45% two weeks ago.
Managed money net long positions on COMEX silver have fallen 35% in the last month to approximately 18,500 contracts, the lowest since February 2026. This flush of speculative length removes a source of potential selling pressure, but it also means there is less fuel for a rapid rebound until new longs are established.
COMEX silver open interest declined 3.2% on the June 10 selloff to 153,000 contracts, suggesting the move was driven by long liquidation rather than fresh short selling. This is a constructive signal: liquidations exhaust themselves, whereas short-building creates a coiled spring.
Implied volatility on 30-day silver options has spiked to 42%, well above the 12-month average of 28%. Options premiums are pricing in a potential 5-7% move on CPI day. The market is bracing for a binary outcome: a 'hot' print pushes silver toward $58; a 'cold' print rallies it back to $70.
The May CPI release is projected at 3.1% year-on-year headline, with core at 2.8%. Any upside surprise would solidify the December rate hike narrative and pressure silver further. A downside surprise would reverse the dollar's recent gains and trigger a relief rally across precious metals.
The CPI/PPI doubleheader this week is the most important macro event for silver. Procurement should hold existing hedges but avoid adding new positions until after the releases. If CPI comes in below 3%, take advantage of the relief rally to set hedges for Q3 delivery requirements.