Silver prices continued their decline in Asian trading on Friday, falling for the second consecutive day and currently hovering around $64.30 per ounce. After a rapid rise, silver prices were clearly nearing a temporary high, so this correction is influenced by profit-taking and also reflects the market's reassessment of the Federal Reserve's monetary policy path, the dollar's performance, and global risk premiums. The recent rise in silver prices is strongly driven by macroeconomic factors. Continued cooling signals from US inflation data have lowered market expectations for further tightening of monetary policy by the Federal Reserve in the short term. Data released by the US Bureau of Labor Statistics showed that the final demand PPI was flat month-on-month in July, significantly lower than the market expectation of a 0.2% increase; the year-on-year growth rate fell to 4.7% from 5.5% in June. Core PPI rose 0.2% month-on-month, also lower than the market expectation of 0.3%. The PPI data corroborates the July CPI. The US July CPI rose 3.4% year-on-year, lower than 3.5% in June, while the core CPI year-on-year growth rate fell to 2.5%, further declining from 2.6% in June. Meanwhile, the core CPI rose 0.2% month-on-month, indicating that while potential price pressures remain, there are no signs of a renewed acceleration. For silver, the cooling inflation has a dual impact. On the one hand, declining inflationary pressures reduce the necessity for further interest rate hikes by the Federal Reserve, pushing down expectations of real interest rates in the US and thus lowering the opportunity cost of holding non-interest-bearing precious metals. On the other hand, if cooling inflation is accompanied by a slowdown in economic growth, industrial demand expectations may be affected. Silver, possessing both precious and industrial metal attributes, may not necessarily replicate gold's price performance. The market has already significantly adjusted its expectations for Fed policy. Related interest rate market pricing shows that investors' expectations for a September rate hike have clearly declined. A later interest rate path means limited upside potential for the dollar and US Treasury yields, providing short-term macroeconomic support for silver. However, market opinions on Fed policy remain divided, preventing a sustained one-sided rise in silver prices. Meanwhile, the previous rapid rise in silver prices has accumulated some profit-taking. After a significant short-term price increase, both trend-following and short-term trading funds have an incentive to lock in profits. The current pullback is more like a valuation digestion within a bullish market than a complete reversal of fundamentals. As long as the dollar does not experience a sustained and significant rebound, the medium-term upward trend for silver remains resilient. From a market sentiment perspective, investors haven't completely turned bearish due to the recent decline. On the contrary, systemic funds are still closely watching whether silver can break through key price areas again. TD Securities' model shows that if silver prices can regain $66.80, Commodity Trading Advisor (CTA) strategies may further increase long positions. The model predicts that under different price scenarios, systemic funds may gradually increase their historically largest long positions by about 3%-4%. This means that $66.80 is not only a technical resistance level but also a trigger zone where quantitative funds may accelerate their re-entry. Furthermore, the correlation between silver and gold remains noteworthy. Gold has also been consolidating at high levels recently. If gold breaks through its previous high, it will improve risk appetite across the entire precious metals sector and provide upward momentum for silver. Conversely, if the dollar suddenly rebounds and US Treasury yields rise, both gold and silver may be suppressed simultaneously, with silver, due to its typically higher volatility, potentially experiencing a more significant pullback. Therefore, investors currently need to focus on US retail sales, speeches by Federal Reserve officials, the dollar index, US Treasury yields, and changes in energy prices. In particular, US consumer data, if significantly lower than expected, could further reduce market expectations for a Fed rate hike, providing new upward momentum for silver; conversely, if the data is significantly stronger than expected, it could lead to a rebound in the dollar and yields, putting further downward pressure on silver. From a daily chart perspective, silver previously rose rapidly from lower levels and is currently in a high-level correction phase, finding some support around $63.50. The current price is still at a relatively high level within the previous upward structure, so a trend reversal cannot be confirmed solely based on two consecutive days of decline. The first resistance level to watch is around $65.00, followed by $66.80, a crucial breakout point for the current bullish trend; a successful break above $66.80 could extend towards $68.00 and the psychological level of $70.00. On the downside, the first support level to watch is around $63.00; a break below this level would target the $61.80-$61.50 area; if the correction continues, the $60 level could become stronger support. Overall, the daily chart structure still leans towards a bullish correction after high-level consolidation, but short-term momentum has clearly cooled. Looking at the 4-hour chart, silver has retreated for two consecutive trading days, and the short-term price structure has shifted from a strong upward surge to a weaker, more volatile consolidation. The $63.00-$63.50 range is a crucial support level for the bulls. If the price can stabilize in this area and break above $65.00 again, it indicates that the downward pressure is releasing, and a retest of $66.80 is possible. Conversely, if the 4-hour chart shows a decisive break below $63.00, the short-term correction could extend further to $61.80 or even around $60. Technically, the momentum after the recent rise is weakening, but as long as there is no continuous breakdown, the current pullback can still be considered a normal correction within the uptrend. $66.80 is a key trigger level for a renewed trend acceleration, while $63.00 is the core support level for determining the integrity of the short-term bullish structure. Editor's Summary: Silver is currently in a phase where macroeconomic positives and short-term profit-taking are interacting. The US July PPI remained flat month-on-month and the year-on-year growth rate fell to 4.7%, while the July core CPI fell to 2.5% year-on-year, reducing the urgency for further interest rate hikes by the Federal Reserve. This provides a relatively favorable interest rate environment for silver. However, silver is not solely driven by interest rate factors. Its industrial attributes mean that global manufacturing demand, energy prices, and economic growth expectations also influence prices. The current price pullback from its highs largely reflects profit-taking after the previous rise and is insufficient to prove that the medium-term upward trend has ended.