Silver Breaks Higher as Lower Yields Weaken Dollar

Key Moments

Silver Gains as Treasury Buyback Expansion Drives Yield Slide

Silver prices (XAG/USD) advanced to a fresh two-month peak of $67.33 during the Asian session on Thursday, extending a strong rally as long-dated United States Treasury yields retreated markedly. The move followed the U.S. Treasury Department’s announcement on Wednesday that it will double the size of buyback operations for long-dated government securities.

According to the report, this expansion in buybacks is seen as increasing the flow of U.S. Dollars into the financial system, placing additional downward pressure on the currency.

Bond Market Moves Undermine the Dollar

At the time of writing, the 10-year U.S. Treasury yield is trading on a weak footing near Wednesday’s low of 4.64%. On Wednesday, yields on the 10-year benchmark fell more than 1.5%. Yields on 30-year U.S. Treasuries are down almost 2% from Tuesday’s close, hovering near 5.18%.

The U.S. Dollar Index (DXY) – which measures the dollar’s performance against a basket of six major currencies – is trading close to a new seven-week low at 98.77. Lower yields on interest-bearing assets tend to make non-yielding alternatives such as silver more attractive, supporting the latest advance in XAG/USD.

FOMC Minutes Flag Possible Rate Hikes

Minutes from the Federal Open Market Committee (FOMC) July meeting indicated that many policymakers saw a need to raise interest rates further if inflation stays elevated. From a theoretical standpoint, a more hawkish policy path is typically unfavorable for non-yielding assets, though current market price action in silver is being driven by the immediate drop in long-dated yields and the weaker dollar.

Technical Picture: Bullish Tone Strengthens

XAG/USD is trading around $67.10, extending its move higher and maintaining a clear distance above the 20-period Exponential Moving Average (EMA) at $63.20. This configuration supports a bullish near-term outlook. The rising EMA is reinforcing the upward trend, while the Relative Strength Index (RSI) sits at 61.48, remaining in positive territory without entering overbought conditions. This suggests buying momentum is solid but not yet overstretched.

On the downside, the recent pivot around $67.10 is acting as immediate support. Below that, the 20-period EMA at $63.20 represents stronger dynamic support, where buyers would likely look to defend the broader uptrend. On the upside, the current structure leaves room for an extension toward $70.00, followed by resistance at the June 16 high of $71.19.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Silver as an Investment Vehicle

Silver is a widely traded precious metal and has historically served as both a store of value and a medium of exchange. While it tends to attract less attention than gold, investors often use silver to diversify portfolios, gain exposure to its intrinsic value, or potentially hedge against periods of elevated inflation. Market participants can access silver through physical holdings, such as coins and bars, or via exchange-traded funds that mirror its price behavior in global markets.