Silver and Gold ETFs Plummet Amid Rising Bond Yields and Rate Hike Bets
Silver ETFs fell by over 3% on Friday due to a steep sell-off in global silver prices, which is often mirrored by the performance of silver ETFs. This decline was accompanied by a similar drop in gold ETFs as rising US bond yields and growing expectations of a Federal Reserve interest rate hike put pressure on precious metals.
The sharp rise in US bond yields has made non-yielding assets like silver and gold less appealing, leading to a shift in investor capital towards interest-bearing instruments. Silver, being more volatile than gold, tends to exhibit higher price fluctuations in response to market sentiment changes.
Silver ETFs are designed to track the performance of physical silver prices, making them a transparent proxy for the underlying commodity's market sentiment. However, this also means that investors holding silver ETFs are fully exposed to the risks associated with sharp declines in global silver prices.