Silver under pressure as rising US yields weaken precious metals appeal

Silver price (XAG/USD) declined 0.7% to near $75.20 during the early European trading session on Thursday, retreating after failing to extend its recovery above the $76.60 level earlier in the session.

The white metal came under pressure as United States Treasury yields rebounded following a sharp correction seen on Wednesday.

The yield on the benchmark 10-year US Treasury note rose 0.3% to near 4.6%, although it remained below the multi-year high of 4.69% recorded on Tuesday.

Treasury yields rebound after Trump’s Iran comments

US Treasury yields had earlier eased after comments from US President Donald Trump indicated that Washington was in the final stages of finalizing a deal with Iran.

Bond yields had rallied over the past two weeks as traders increased bets that the Federal Reserve could raise interest rates later this year.

The expectations were driven by elevated oil prices amid concerns linked to the Strait of Hormuz closure.

According to the CME FedWatch tool, the probability of the Federal Reserve delivering at least one interest rate hike this year currently stands at 51%.

The shift marks a sharp reversal from earlier market expectations, when traders had anticipated two interest rate cuts before the Middle East conflict began.

Higher Treasury yields generally reduce the attractiveness of non-yielding assets such as Silver, as investors tend to favour interest-bearing instruments during periods of rising yields.

Inflation outlook keeps bond yield sentiment firm

The outlook for US bond yields is expected to remain bullish unless inflation in the United States begins showing signs of cooling.

Market participants continue to monitor inflation expectations closely, as persistent price pressures could reinforce the case for tighter monetary policy.

A sustained rise in yields may continue weighing on precious metals, including Silver.

Silver technical outlook remains weak

Silver traded around $75.22 at the time of writing, while maintaining a bearish near-term outlook.

The metal continues to trade below the 20-day Exponential Moving Average (EMA) at $77.84.

Price action also remains below the upward-sloping boundary of an Ascending Triangle formation, which is now acting as resistance near $78.31.

The breakdown below the trend support level suggests a possible corrective phase within the broader upward trend.

Meanwhile, the Relative Strength Index (RSI-14) hovered near 46, indicating neutral-to-soft momentum conditions.

The reading suggests downside pressure remains intact, although the market has not yet entered oversold territory.

Key levels to watch for the Silver price

On the upside, immediate resistance is seen near the 20-day EMA around $77.84, which continues to cap recovery attempts.

Beyond that, the next major resistance level stands at the May 15 high of $83.88.

On the downside, Silver could decline toward $70 if it fails to reclaim the upward-sloping trendline of the Ascending Triangle pattern.

A sustained move below $70.00 could expose the metal to further weakness toward the March 26 low at $66.71.