Silver Trapped Between Geopolitical Tensions and Rising Bond Yields
The silver price remains stuck in a tight range, unable to hold above $60 an ounce as it navigates the complex interplay between geopolitical tensions and rising bond yields.
Escalating Middle East conflicts have boosted oil prices to multi-week highs, fueling fresh inflation concerns that are weighing on precious metals like silver. The conflict premium is supporting the metal at around $57 per ounce, but the relentless advance in bond yields is capping its potential upside.
The 10-year US Treasury yield climbed to 4.714% on Thursday, the highest level in the current move, and market pricing now reflects a roughly 78% probability of a Federal Reserve rate hike in September. This hawkish shift has been a particular drag on silver, which offers no yield and suffers when real rates rise.
Fresnillo, one of the world's largest primary silver producers, reported a 1.7% sequential decline in attributable silver output to 10.9 million ounces in the second quarter, further tightening the global supply picture. However, the company maintained its full-year guidance of 42.0 to 46.5 million ounces of attributable silver production.