Silver Price Plunges 5% Amid Stronger US Dollar and Rising Yields
Silver prices plummeted around 5% on Monday, falling to their lowest level since early August. The decline is largely attributed to a stronger US Dollar and rising US Treasury yields, which increase the opportunity cost of holding silver.
The US 10-year Treasury yield has reached its highest level since 2007, at 5.27%, while the US Dollar Index holds near 101.25, close to a two-month high. This makes silver more expensive for overseas buyers and further weighs on its price.
A busy week of US data is ahead, including the Personal Consumption Expenditures (PCE) inflation report on Wednesday, the ISM Manufacturing Purchasing Managers’ Index (PMI) on Thursday, and Nonfarm Payrolls (NFP) on Friday. Markets are pricing in a 70% chance of another rate hike in October, according to CME FedWatch.
The technical analysis suggests that silver is under pressure, with moving averages acting as overhead resistance and the Relative Strength Index leaning towards bearish momentum.