US Debt Buyback Program Triggers Silver Surge Amid Dollar Weakness

Silver prices have been rising steadily, reaching $69.75 and posting a gain of over 2.41% on Friday. This marks its highest level in two months and is part of a weekly advance of more than 7%. The main driver behind this increase is the weakness of the US Dollar (USD), which has been under pressure due to the surprise announcement by the United States Department of the Treasury regarding its debt buyback program.

The program aims to at least double purchases of longer-dated government securities, aiming to contain borrowing costs. This move initially led to a sharp decline in US Treasury yields and the value of the USD. Although Treasury yields have since partially recovered their losses, Silver's advance has continued, driven by concerns over the long-term implications of US fiscal policy.

Investors are worried about rising government debt, large budget deficits, and the possibility that authorities may prefer a weaker Dollar to higher interest rates. Commerzbank notes that the Treasury's announcement suggests authorities may prioritize a weak currency, adding another headwind for the USD and supporting Silver's rise.