Silver, US 10-Year Yield, and Interest Rate Dynamics
the relationship between silver prices, the US 10-year Treasury yield (US10Y), and interest rates is characterized by strong inverse correlations, driven by macroeconomic forces and monetary policy expectations. Below is a detailed analysis:
1. Silver and US 10-Year Yield: Inverse Correlation
Core Mechanism: Silver prices typically move inversely to the US 10-year yield. When bond yields rise, silver becomes less attractive as a non-yielding asset, increasing its opportunity cost. Conversely, falling yields boost silver’s appeal.
Current Data (June 2025):
US10Y: ~4.377% (slightly down from recent peaks).
Silver (XAG/USD): ~$36.02.00/oz,
Historical Evidence:
A correlation coefficient of -0.94 between silver and 5-year yields (and -0.86 vs. 10-year yields) confirms this inverse link.
Periods of declining yields (e.g., 2024–2025) coincided with silver rallies (Aprail 2024 and jan 2025) silver buyers come bullish
2. Interest Rates and Silver: Opportunity Cost Driver
Rate Hikes: Higher interest rates strengthen the dollar and increase the opportunity cost of holding silver, pressuring prices.
Rate Cuts: Lower rates weaken the dollar and reduce silver’s opportunity cost, boosting demand.
Fed Policy Impact (June 2025):
The Fed held rates at 4.25%–4.50%, but signaled potential cuts in late 2025, will give silver under valued metal a bullish impulse.
Geopolitical/Safe-Haven Demand Conflicts (e.g., Israel-Iran) or recessions increase silver’s appeal.
Industrial Demand Renewable energy/electronics demand provides structural support.
4. Current Market Outlook
Bearish Pressures:
Rising bond yields or delayed Fed cuts could trigger silver selloffs.
US10Y above 4.5% historically pressured silver.
Bullish Catalysts:
Fed rate cuts (expected late 2025) and falling real yields could drive silver toward $40/oz. to 50$
Geopolitical risks and sustained central bank buying (e.g., inflation hedging) add upside.
Conclusion: Silver remains highly responsive to US10Y and interest rate shifts, with real yields being the paramount driver. In 2025, silver’s rally hinges on Fed easing, subdued real yields, and safe-haven demand—though bond yield resurgences pose risks.
#silver #gold #dollar
the relationship between silver prices, the US 10-year Treasury yield (US10Y), and interest rates is characterized by strong inverse correlations, driven by macroeconomic forces and monetary policy expectations. Below is a detailed analysis:
1. Silver and US 10-Year Yield: Inverse Correlation
Core Mechanism: Silver prices typically move inversely to the US 10-year yield. When bond yields rise, silver becomes less attractive as a non-yielding asset, increasing its opportunity cost. Conversely, falling yields boost silver’s appeal.
Current Data (June 2025):
US10Y: ~4.377% (slightly down from recent peaks).
Silver (XAG/USD): ~$36.02.00/oz,
Historical Evidence:
A correlation coefficient of -0.94 between silver and 5-year yields (and -0.86 vs. 10-year yields) confirms this inverse link.
Periods of declining yields (e.g., 2024–2025) coincided with silver rallies (Aprail 2024 and jan 2025) silver buyers come bullish
2. Interest Rates and Silver: Opportunity Cost Driver
Rate Hikes: Higher interest rates strengthen the dollar and increase the opportunity cost of holding silver, pressuring prices.
Rate Cuts: Lower rates weaken the dollar and reduce silver’s opportunity cost, boosting demand.
Fed Policy Impact (June 2025):
The Fed held rates at 4.25%–4.50%, but signaled potential cuts in late 2025, will give silver under valued metal a bullish impulse.
Geopolitical/Safe-Haven Demand Conflicts (e.g., Israel-Iran) or recessions increase silver’s appeal.
Industrial Demand Renewable energy/electronics demand provides structural support.
4. Current Market Outlook
Bearish Pressures:
Rising bond yields or delayed Fed cuts could trigger silver selloffs.
US10Y above 4.5% historically pressured silver.
Bullish Catalysts:
Fed rate cuts (expected late 2025) and falling real yields could drive silver toward $40/oz. to 50$
Geopolitical risks and sustained central bank buying (e.g., inflation hedging) add upside.
Conclusion: Silver remains highly responsive to US10Y and interest rate shifts, with real yields being the paramount driver. In 2025, silver’s rally hinges on Fed easing, subdued real yields, and safe-haven demand—though bond yield resurgences pose risks.
#silver #gold #dollar
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.