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Benchmark 10-year Treasury yields surged above 4.5%, weighing on gold, which offers no yield. Since peaking above $3,500 in April, gold has retreated more than 7%, reflecting shifts in market sentiment.
Silver Holds Steady, But Lacks Breakout Momentum
Silver (XAG/USD) traded around $32.39, showing resilience but limited upside. Like gold, silver faces headwinds from a stronger dollar and elevated bond yields. However, the metal has found modest support as expectations mount for Fed easing in the second half of the year.
“Traders are weighing rising yields against a softer inflation backdrop and geopolitical noise,” noted a commodities strategist at KCM Trade. “Until we get a decisive Fed pivot, metals are likely to remain rangebound.”
Silver’s performance mirrors a cautious tone in metals markets, where investors are recalibrating positions amid macro crosswinds.
Mixed Signals: Trade Optimism vs. Geopolitical Risk
Geopolitical risks remain unresolved, with rising tensions in Eastern Europe and the Middle East helping to underpin gold’s floor. Over the weekend, Russia launched its largest drone strike on Ukraine since 2022, escalating concerns about regional security.
Simultaneously, trade optimism is chipping away at risk-averse sentiment. U.S. Treasury Secretary Scott Bessent remarked that “several nations are signaling readiness for fair trade arrangements,” easing fears of an imminent recession. This shift in narrative is reducing investor appetite for traditional safe-havens like gold.
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