Silver ETFs Soar up to 6% as Cooling US Yields Lift Precious Metals

Silver exchange-traded funds (ETFs) surged up to 6% on Thursday, August 20, following a pullback in US 30-year Treasury yields. The cooling yields reduced the opportunity cost of holding non-yielding precious metals such as silver and gold.

The US Treasury Department announced it would double the size of liquidity support buyback operations, pausing the surge in yields. This move caused the yield on 30-year US Treasuries to fall to 5.18% after reaching 5.3% on Tuesday.

Tata Silver ETF, Nippon Silver ETF, HDFC Silver ETF, SBI Silver ETF, Axis Silver ETF, DSP Silver ETF, Groww Silver ETF all gained over 4% each, while Mirae Asset Silver ETF, ICICI Prudential Silver ETF, Aditya Birla Sun Life Silver ETF, Edelweiss Silver ETF and Motilal Oswal Silver ETF rose by more than 3%.

Ajit Mishra, SVP Research at Religare Broking, attributed the gains to the Fed's stable yet hawkish stance in its recent FOMC minutes. Nirpendra Yadav, senior research analyst at Bonanza, noted that silver prices have rebounded strongly due to a weaker US dollar, lower US Treasury yields, and renewed precious-metal buying.