Silver Drops to Two-Month Low as Yields and Dollar Strengthen

Silver prices have dipped to near $60.50 per troy ounce, marking a two-month low. The decline comes amid rising US Treasury yields and a stronger dollar, which have outweighed softer jobs data. Geopolitical tensions in the Middle East, particularly Houthi strikes in Saudi Arabia, have driven safe-haven demand for the US dollar, further pressuring silver.

The precious metal had briefly gained earlier due to weak US employment figures and reduced expectations of a Federal Reserve rate hike in October. However, surging service-sector inflation has pushed Treasury yields to 24-year highs, counteracting these supportive factors. Strategists at HSBC noted a sharp repricing in long-dated bonds, with G7 yields climbing significantly since January.

Silver remains sensitive to the US dollar's strength and interest rate movements, as it is a yieldless asset. Industrial demand, particularly from sectors like electronics and solar energy, also influences its price. While silver often follows gold's movements, the current market dynamics highlight the dominance of macroeconomic factors over individual metal trends.