Silver Hits $65.80 as Yields Drop and Oil Falls

Silver prices climbed to $65.80 per troy ounce during Asian trading hours on Friday. This marked the second consecutive session of gains for the precious metal. The advance coincided with a drop in US Treasury yields and a retreat in crude oil prices.

US 10-year Treasury yields eased to approximately 4.93% after briefly exceeding 5.0% earlier in the week. Lower energy costs helped reduce inflation concerns. This dynamic increased the appeal of non-yielding assets like silver among investors.

Oil Supply Updates Drive Market Shifts

Crude oil prices faced pressure after reports indicated Saudi Arabia is working to restore shipments through its East-West pipeline. Market participants also focused on planned meetings between US President Donald Trump and Gulf leaders. These developments contributed to the broader decline in bond yields.

Strategists at Societe Generale noted that the fixed-income market benefited from the drop in energy prices. They observed that lower oil and gas prices provided support to bonds at the open. The bond market reacted positively to reports of resumed negotiations over Iran.

Fed Hike Odds Rise to 53.1 Percent

Investors are reassessing monetary policy following the Federal Reserve’s first rate increase in three years. Fed Chair Kevin Warsh adopted a hawkish tone, citing persistent inflation. He stated that recent economic indicators did not show meaningful structural progress.

Market expectations shifted in response to these remarks. The CME FedWatch tool showed the probability of another rate hike in October rising to 53.1%. This was an increase from 44% the previous day. Traders continue to digest the upward revision of the dot plot.

Silver Serves as Inflation Hedge

Silver functions as a store of value and a means of exchange. It attracts less attention than gold but offers portfolio diversification benefits. Investors often use silver as a hedge during periods of elevated inflation. Exposure can be gained through physical coins, bars, or exchange-traded funds.

Silver valuation responds to geopolitical stress and economic downturn concerns. As a yieldless asset, it becomes more attractive when interest rates decline. The US dollar strength also impacts prices, with a weaker dollar typically supporting silver values. Mining output and recycling flows provide additional influences.