Silver Under Pressure! US Yields and Dollar Weigh Heavily

Silver prices (XAG/USD) weakened again during Tuesday's trading, hovering around US$60.75 per troy ounce. Pressure stemmed from rising US Treasury yields and a strengthening dollar, while uncertainty surrounding the Strait of Hormuz kept energy prices high and fueled inflation concerns.

The 10-year US Treasury yield climbed to approximately 5.28%, its highest level since 2007. This reinforced expectations that the Federal Reserve would need to maintain a tight monetary policy. Markets now estimate a roughly 70% probability of an interest rate hike in October, placing non-yielding assets like silver under pressure.

Geopolitically, Iran and the US continue indirect talks via Qatari mediators regarding the Strait of Hormuz. However, no significant breakthrough has been achieved, and the two sides remain at odds over the terms of a potential agreement. Trump also denied reports that Washington had offered sanctions relief to Iran.

Meanwhile, some US economic data have begun to show signs of weakness. Consumer Confidence fell to 81.9, while JOLTS Job Openings dropped to 7.079 million. These figures could factor into the Fed's decision-making, particularly if the labor market continues to soften.

Newsmaker Analysis:

Silver is currently caught between the pressure of high US yields and a strong dollar, and the prospect of a weakening US economy. Attention now shifts to the PCE, ISM Manufacturing PMI, and NFP reports. Data coming in weaker than expected could alleviate pressure on silver, whereas strong data might reinforce expectations for rate hikes and push XAG/USD lower.

Source: Newsmaker.id