Silver (XAG/USD) has stalled near the $60 per ounce mark, struggling to gain traction as a rally in US Treasury yields pressures the precious metals complex. The metal, which touched an intraday high of $60.45 on Tuesday, has since retreated to around $59.80 as of Wednesday morning in London, according to data from LSEG.
The pullback comes as the yield on the benchmark 10-year US Treasury note climbed to 4.35%, its highest level in three weeks, driven by stronger-than-expected US economic data and hawkish commentary from Federal Reserve officials. Higher yields increase the opportunity cost of holding non-yielding assets like silver and gold, often triggering selling pressure.
Also read: Softer UK CPI data reinforces case for prolonged Bank of England hold, TD Securities says
Technical levels to watch
From a technical perspective, silver is trading in a narrow range between support at $58 and resistance at $62. The $58 level has held firm over the past two weeks, providing a floor for the metal. A decisive break below that level could open the door to a test of the $55 zone, which served as support in early February.
On the upside, a move above $62 would signal renewed bullish momentum, potentially targeting the $65 area, a level not seen since late 2023. However, traders note that the metal needs a catalyst — such as a weaker US dollar or a surprise uptick in industrial demand — to break out of its current range.
Also read: Euro slips against yen despite rising ECB rate hike expectations
What this means for investors
For investors holding silver positions, the current environment demands patience. The metal remains caught between competing forces: on one hand, strong industrial demand from solar panel manufacturing and electronics production provides a fundamental floor; on the other, rising real yields and a resilient US dollar cap upside potential.
The broader commodities market has also been mixed, with copper edging higher while gold treads water near $2,300 per ounce. Silver often tracks gold but with greater volatility due to its dual role as both a monetary metal and an industrial input.
Key drivers to watch
Several factors could determine silver’s next move:
- US economic data: Upcoming releases on inflation, retail sales, and manufacturing will influence Fed policy expectations and, by extension, Treasury yields and the dollar.
- Fed speeches: Comments from Fed officials in the coming days could shift rate-cut expectations. A more dovish tone would likely boost silver.
- Industrial demand signals: China’s manufacturing PMI and global solar installation data are closely watched by silver traders.
- Geopolitical risk: Escalation in global tensions could drive safe-haven buying, benefiting silver alongside gold.
The CME Group’s silver futures market shows open interest has declined slightly over the past week, suggesting some traders are reducing exposure ahead of key data. The next major test for silver will come with the release of US consumer price index data next week, which could either confirm the current trajectory or spark a breakout.
