Gold, Silver Prices Plummet Amid Rising Bond Yields

Global sovereign bond yields have been climbing steadily, eroding the appeal of non-yielding assets like gold and silver. As a result, prices for both metals plummeted on Monday (the 28th), with U.S.-listed precious metals mining stocks broadly lower in premarket trading.

Silver futures led the decline, falling over 5% to $61.52 per ounce, while spot silver dropped nearly 5% to $61.11. Gold futures weren't far behind, losing 3.34% to $4,176.80 per ounce.

The decline in precious metals prices directly impacted mining stocks, with major gold producers Sibanye Stillwater (SBSW), Harmony Gold Mining (HMY), and Newmont Corporation (NEM) all taking significant hits. Silver miners like Silvercorp Metals (SVM), Endeavour Silver (EXK), and Hecla Mining (HL) also suffered losses.

According to Max Baecker, president of American Hartford Gold, if rate hikes succeed in bringing inflation under control, gold could continue to face headwinds. However, he noted that global central banks purchased a record 289 metric tons of gold in the second quarter, indicating a longer-term foreign exchange reserve allocation strategy.

Market observers attribute the precious metals sell-off to the change in real interest rates, which increases the opportunity cost of holding gold when bond yields rise faster than inflation expectations. The technical aspect also played a role, as gold futures breached the $4,200 level, triggering programmatic sell orders that amplified the decline.