Silver Slumps 4.5% Amid Soaring US Yields and Strong Dollar

Silver prices plummeted on Monday, dropping by 4.53% to trade around $61.40, as elevated US Treasury yields and a firm Dollar exert heavy pressure on non-yielding assets like precious metals.

The recent hike in US interest rates and expectations of further rate increases have fueled concerns about inflation, potentially forcing the Federal Reserve (Fed) to maintain a restrictive monetary policy stance for longer than anticipated.

Money markets now price in around a 68% chance of another interest rate hike at the Fed's October meeting, according to the CME FedWatch tool. This reassessment has contributed to higher US Treasury yields, making it more expensive to hold precious metals that offer no interest.

The geopolitical tensions and their implications for global energy supplies have also kept Oil prices elevated, supporting the safe-haven US Dollar (USD) and adding downward pressure on XAG/USD.