Silver (XAG/USD) declined sharply on Wednesday, approaching two-month lows around the $60.00 psychological level after being rejected from near $62.00 on Tuesday [1]. The drop in silver prices is attributed to a combination of rising oil prices, higher long-term US Treasury yields, and a stronger US Dollar ahead of the release of the Federal Open Market Committee (FOMC) Minutes from the latest Federal Reserve meeting [1].
The yield on the US 30-year Treasury note reached a multi-decade high above 5.70% on Wednesday, while the benchmark 10-year yield rebounded above 5.30%, nearing a 24-year high at 5.34% [1]. This surge in yields has increased investor caution ahead of a closely watched 10-year Treasuries auction and the release of the Fed's minutes [1]. The Federal Reserve raised rates for the first time in three years at its September meeting and signaled the possibility of further hikes. While expectations for consecutive rate hikes have diminished due to easing US inflation and labor data, investors still anticipate at least a half percentage point increase in borrowing costs over the next two quarters [1].
Technically, XAG/USD was trading at $60.13 at the time of reporting, with momentum indicators such as the Relative Strength Index (RSI) below 40 and the Moving Average Convergence Divergence (MACD) below zero, both supporting a bearish outlook [1]. Immediate price action suggests that the $60.00 support area is likely to be tested again, and a break below this level could expose the late July and early August lows near $56.50 [1]. On the upside, bulls would need to reclaim the $62.15–$62.25 area to relieve bearish pressure and target the September 25 high near $65.00 [1].
CONCLUSION
Silver prices are under pressure due to rising US Treasury yields and a stronger dollar, with technical indicators pointing to further downside risk. Investors remain cautious ahead of key US economic events, and a break below $60 could lead to further declines toward $56.50. The market remains focused on upcoming Fed communications and Treasury auctions for further direction.