Gold and Silver Slump Amid Soaring Treasury Yields

The gold and silver markets are experiencing intense selling pressure due to rising U.S. Treasury yields. The 10-year Treasury yield has climbed towards 5.16%, its highest level since 2007. This surge in bond yields makes non-yielding assets such as precious metals less attractive to investors.

As a result, gold futures dropped around 3.3% to nearly $4,177/oz, while silver fell about 5% toward $61.50/oz. The increase in Treasury yields is not the only factor contributing to the decline of precious metals. Markets are also pricing in a higher probability of additional Federal Reserve tightening.

However, gold still has structural support from central banks, which purchased approximately 289 tonnes of gold in Q2. This indicates that there is still significant strategic demand for gold beyond short-term speculative flows.

The battle between rising real yields and structural demand for precious metals will continue to be a key factor in the markets. For now, traders should keep a close eye on U.S. Treasury yields and their impact on gold and silver prices.