Yields Surge, Silver Loses Momentum
Silver prices weakened during the European session on Tuesday (August 18) after initially trading higher. Based on the latest quotes, XAG/USD hovered around US$64.98 per troy ounce, down from the previous close of approximately US$65.78. Silver traded within a range of roughly US$64.76–US$66.55 today, reflecting significant volatility.
The primary pressure stemmed from a surge in US bond yields. The 10-year Treasury yield rose to around 4.74%, while the 30-year yield reached approximately 5.33%—levels not seen since 2007. Rising yields made non-interest-bearing assets like silver and gold relatively less attractive, triggering a broader correction across the metals market.
Persistently high oil prices also weighed on the market. Brent crude remained around US$91 per barrel due to the US-Iran conflict standoff and escalating risks in the Strait of Hormuz. The surge in energy costs reignited inflation concerns, meaning the market has not entirely ruled out further tightening by the Federal Reserve should price pressures intensify again.
Nevertheless, monetary policy fundamentals continue to provide support for silver. Following weaker US data on employment, inflation, and retail sales, the market now assigns only a ~36.6% probability of a September rate hike, making a Fed rate hold the more likely scenario. The Dollar Index also remains relatively weak, hovering around 99.5.
On the demand side, silver retains structural support from technology sectors such as solar panels, electric vehicles, power grids, data centers, and AI infrastructure. However, the Silver Institute projects that overall industrial usage could decline by about 2% by 2026 due to efficiency gains and substitution—particularly within the photovoltaic industry—meaning industrial demand is not yet acting as a strong short-term bullish catalyst.
Newsmaker Analysis: Silver is currently facing short-term pressure from yields and oil prices, while expectations of a Fed rate hold are helping to limit the downside. The US$64.75–US$65 zone serves as a key support level; a break below this could see downward pressure extend toward the US$64–US$63.50 range. Conversely, if buyers can push XAG/USD back above US$65.50, the potential to test the US$66–US$66.55 levels re-emerges. Attention now shifts to Wednesday's FOMC minutes, which could determine the direction of the dollar, yields, and precious metals. (arl)
Source: Newsmaker.id
