Silver Dips Near $60.50 Amid Rising Treasury Yields and Dollar Strength
Silver prices (XAG/USD) have retreated from recent gains, trading around $60.70 per troy ounce during Asian hours on Tuesday. The precious metal remains near two-month lows as a strong US Dollar and rising Treasury yields overshadow supportive economic factors.
The US Dollar has strengthened due to heightened geopolitical tensions in the Middle East, particularly after Yemen’s Houthi group launched strikes on Saudi targets. These attacks, which hit military sites and disrupted air traffic, have increased safe-haven demand for the Dollar.
US Treasury yields have surged to 24-year highs amid a global bond selloff, driven by fiscal risks and persistent inflation. Despite weaker labor market reports reducing the likelihood of an October interest rate hike by the Federal Reserve, rising yields and a firm Dollar continue to pressure silver prices.
Strategists at HSBC note that G7 bond yields have climbed roughly 1% since January, with long-dated US Treasuries and UK Gilts exceeding 5%. They attribute this to a sharp repricing in core rates markets, sparking debate over the drivers of higher real yields and their impact on fixed income investors.