Silver Prices Under Pressure Amid Strong Dollar and High Yields

Silver prices have been under pressure due to a strong US dollar and high Treasury yields. The precious metal has lost over 6% in value last week, with investors reducing their bullish positions. Despite hopes for an October Federal Reserve (Fed) pause, the inflation outlook keeps further rate increases in view.

The improvement in factory activity in both the US and China may support industrial demand for silver, but the current market conditions remain challenging. In order for silver to sustain a recovery, lower real yields and a weaker dollar are needed. The key technical levels that could shape the next move in silver include $57-$58, which is seen as support.

The soft US hiring data supports the case for a Fed pause in October, but the inflation outlook keeps further rate increases in view. This mixed economic picture continues to limit the recovery in silver prices.