Silver Price Sinks as US Yields and Dollar Soar

The Silver price took an unexpected turn on Thursday, reversing its earlier gains and turning negative. The white metal had reached an intraday high of $58.65 but then gave back its early gains, trading 0.7% lower at around $57.25 in the European session.

According to ANZ analyst Soni Kumari, surging US Treasury Yields on expectations that the Federal Reserve (Fed) would need to hike interest rates in the near-term have diminished the appeal of non-yielding assets like Silver.

The rise in yields is a byproduct of rate expectations, and if the market expects inflation fears to translate into higher rates, yields will be higher, Kumari said. This has put pressure on gold, and historically, Silver reacts similarly to Gold against bond yields.

A decent recovery in the US Dollar Index (DXY) to near 101.00 also hurt the Silver price, as a stronger dollar makes Silver an unfavorable risk-reward bet for investors.