Silver Struggles as Dollar Strength and High Yields Weigh

Silver (XAG) continues to face downward pressure after a steep decline of over 6% last week. The metal's struggles are being exacerbated by high Treasury yields and a strong US dollar, which are acting as significant headwinds to any potential recovery. While softer US hiring data supports the possibility of a Federal Reserve rate pause in October, lingering inflation concerns keep the door open for further rate hikes, which could prolong silver's struggles.

The recent improvement in factory activity in both the US and China might provide a boost to industrial demand for silver. However, investors have been scaling back their bullish positions, reflecting a cautious outlook. Analysts suggest that silver would need lower real yields and a weaker dollar to turn the tide and sustain a recovery.

The article delves into the fundamental drivers currently shaping silver's trajectory, including the US dollar's outlook and the key technical levels that could influence the metal's next move. With the $50 mark now in focus, traders are closely watching these factors to gauge silver's future direction.