Silver (XAG/USD) has resumed its downtrend, trading in the mid-range of $62.00 and approaching year-to-date lows near $61.00, following a brief recovery attempt on Monday [1]. The decline is attributed to rising US Treasury yields, with the 10-year note jumping above 4.5% and the 2-year yield reaching 4.23%, its highest in 16 months, as markets price in a 70% chance of Federal Reserve monetary tightening in September, spurred by hawkish rhetoric from new Fed Chairman Kevin Warsh [1]. This surge in yields is weighing heavily on yieldless precious metals like silver [1][2].
ETF outflows have further pressured silver prices, with Bloomberg data showing silver ETFs cut holdings by 205,925 oz in the latest session and by 2.95 million oz last week, resulting in year-to-date net sales of 79.1 million oz, a 9.2% decline in holdings [2]. OCBC’s Christopher Wong notes that ETF demand is no longer providing the same support, and persistent outflows point to investor demand being pared back [2].
Technical analysis from both sources highlights bearish momentum, with XAG/USD trading at $62.46 and the Relative Strength Index (RSI) slipping toward oversold territory, though no clear sign of a correction is evident [1]. OCBC observes mild bearish momentum but notes that the decline in RSI shows tentative signs of slowing, suggesting possible consolidation if support at $63 and $61 holds [2]. Resistance is identified at $69.40 (200 DMA), $70.5 (21 DMA), and $75.60 (50 DMA) [2], while immediate support is at $61.00, with further downside targets at $60.00 and $59.00 [1].
Looking ahead, OCBC expects near-term price action to remain soggy unless US yields soften or ETF liquidation slows more clearly [2]. The medium-term deficit story for silver remains intact, but the near-term outlook is bearish, with consolidation likely below key resistance levels [2].
CONCLUSION
Silver is under significant pressure from rising US yields and persistent ETF outflows, driving prices toward seven-month lows. Analysts expect continued bearish momentum and possible consolidation if key support levels hold, with any recovery dependent on a reversal in US yields or a slowdown in ETF liquidations.