Silver Prices Stuck in Downtrend Amid Strong Dollar and High Yields

Silver prices remain under pressure after losing over 6% last week. The high Treasury yields and strong US dollar continue to limit silver's recovery. These factors make it challenging for silver to sustain a rebound, especially with investors having reduced their bullish positions. However, the improvement in factory activity in both the US and China may support industrial demand for silver.

The inflation outlook remains a concern, keeping further rate increases in view. This is despite the soft US hiring data supporting the case for the Fed to pause interest rates in October. Silver needs lower real yields and a weaker dollar to sustain a recovery, according to this analysis.