The iShares Silver Trust ETF (SLV) has experienced a remarkable surge, reaching its highest level since February 2021. This significant increase of 72% from its 2020 low is a testament to the growing demand for silver. The recent US inflation data has contributed to this upward trend, making silver one of the best-performing metals in the industry.

The surge in silver and gold prices can be attributed to the expectation that the Federal Reserve will cut interest rates in the second half of the year. Leading indicators such as housing starts, building permits, retail sales, and consumer confidence suggest a slowing economy. Wage growth has also slowed, which could help reduce the inflation rate in the US. The recent data reveals a slowdown in the headline Consumer Price Index (CPI) and core CPI, signaling the end of the reflation trend.

Silver has followed the upward trend of other precious and industrial metals, with gold soaring to over $3,900 and copper reaching a record high. The Chinese economy is also showing signs of improvement, with industrial production rising and unemployment rates dropping. Additionally, the lack of new mine discoveries and longer permitting processes have contributed to the surge in silver prices.

The iShares Silver Trust ETF has formed an inverse head and shoulders pattern, a bullish sign in the financial market. It has moved above the neckline of this pattern and remains above the 50-week and 100-week Exponential Moving Averages (EMA). The fund has reached a crucial resistance level at $28, its highest level since February 2021. The Relative Strength Index (RSI) and Stochastic Oscillator have also risen to overbought levels, indicating a continued upward trend for the SLV ETF, with the next level to watch being at $30.