Silver Drops 8 Cents as Firm Dollar Offsets Falling Yields
Spot silver fell to $65.86 Monday. The dollar index rose to 100.32, capping the metal's rebound despite a drop in Treasury yields.
Key points
- Spot silver fell to $65.86 as the dollar index rose to 100.32.
- 10-year Treasury yields dropped to 4.959%, but this did not support silver prices.
- The gold-silver ratio near 66 suggests silver is outperforming gold in the rebound.
Spot silver dropped 8 cents to $65.86 Monday. The U.S. dollar index rose 0.10% to 100.32, offsetting the decline in 10-year Treasury yields.
The 10-year yield fell to 4.959%, down 4.1 basis points. This move failed to support silver because the stronger dollar increased the opportunity cost of holding the metal. FXEmpire notes the currency remains the dominant driver.
Dollar Strength Caps the Metal Rebound
Silver rebounded from the $62.31 low to test $67.30 on Friday. Monday’s session showed sellers limiting gains as the dollar recovered from its weekly low. The net effect was a flat tape with minimal volume.
The 200-day moving average at $73.15 remains a major hurdle. Support sits at $65.32, followed by the 50-day average at $63.14. Traders are waiting for the dollar to weaken before buying resumes.
Fed Policy and Crude Oil Dynamics
The Federal Reserve raised rates 25 basis points to 3.75%-4.00% last week. Markets now price in at least one more increase this year. This hawkish stance keeps pressure on precious metals.
Brent crude fell below $102 and WTI broke under $100. Four consecutive days of lower oil prices have not yet shifted the Fed’s inflation outlook. Silver traders are prioritizing the rate outlook over energy trends.
Gold Silver Ratio Signals Relative Strength
The gold-silver ratio fell near 66 during the recent rebound. Silver outperformed gold on the bounce from the lows. This indicates industrial and speculative buyers favor silver over gold.
Early European trading saw thin volume and modest selling. New York sessions will determine if $65.32 support holds. The structure from the $62.31 low remains intact for now.
