US Treasury Move Boosts Silver to Two-Month High

Silver prices surged to $65.5 per ounce on Wednesday, reaching a two-month high, after the US Treasury announced it would double its buyback operations on long-term securities.

The move triggered a sharp decline in longer-term Treasury yields and was part of the department's efforts to limit pressure on the long-end of the curve.

This included intervening on the yen market and calling on the Federal Reserve to increase limits on the FIMA facility, which led to lower borrowing costs.

Silver benefited from these changes as it bears no interest payments, making it more appealing to hold.

Additionally, industrial demand for silver was supported by strong Chinese imports of silver-bearing ores, which surged 62.5% annually in June to 219,000 tonnes.

This growth in imports is attributed to expanding production for solar panels and electricity grids, but lingering risks of a flare-up in energy prices kept silver relatively close to its seven-month low of $55 per ounce from July 16th.