Silver Drops Near $60.70 as Treasury Yields Climb

Silver prices (XAG/USD) have retreated from recent gains, falling to around $60.70 per troy ounce during Asian trading on Tuesday. The decline comes as the US Dollar strengthens and Treasury yields surge, overshadowing supportive economic factors. While softer US employment data and reduced expectations of a Federal Reserve rate hike in October provided brief relief, broader pressure persists on precious metals.

The US Dollar has gained traction amid escalating geopolitical tensions in the Middle East, particularly after Yemen’s Houthi group launched strikes on Saudi targets. These attacks disrupted air traffic and unsettled global markets, boosting safe-haven demand for the Dollar.

Silver faces additional pressure from rising US Treasury yields, which hit 24-year highs due to a global bond selloff driven by fiscal risks and persistent inflation. Despite a 78% market expectation that the Federal Reserve will hold rates steady, the firm Dollar and higher yields continue to weigh on silver.

Strategists at HSBC highlight a significant repricing in long-dated bonds, with G7 yields climbing roughly 1% since January. They note that this move reflects broader debates over the drivers of higher real yields and its impact on fixed-income investors.