Bond Yields Squeeze Gold, Silver Prices Amid War and Inflation Fears

Gold and silver prices are falling due to rising bond yields in the US. This is happening amid geopolitical tension and economic uncertainty, including the ongoing war between Iran and the US. The US 10-year Treasury yield has increased by about 11% since last month, reaching around 5.25%. At the same time, gold prices have dropped by over 8% to around $4,164 per ounce, while silver prices are also down by 8% to approximately $61.55 an ounce.

Colin White, president and CEO of Verecan Capital Management, suggests that investors are choosing bonds over precious metals because they offer a guaranteed interest rate, which is currently around 5%. This makes them more attractive than holding gold or silver, which do not pay any interest.

The US government's spending on the war against Iran has been significant, with over $25 billion spent so far. The conflict has also led to higher oil prices and inflation expectations, which can influence bond yields. Central banks, including the US Federal Reserve, have raised interest rates in response to rising inflation, making bonds more attractive as an investment.