Silver prices (XAG/USD) faced downward pressure during Monday’s European session, dipping to a key support level of $29.00 after briefly touching near $29.60. The decline comes as US bond yields rebound, with 10-year Treasury yields edging up to approximately 4.24%. This resurgence in yields increases the opportunity cost of holding non-yielding assets like silver.
Federal Reserve (Fed) officials remain divided on the path of interest rates, with Chicago Fed Bank President Austan Goolsbee expressing relief over cooler inflation reports for May. Goolsbee, however, emphasized the need for sustained data before advocating for rate cuts.
Over the weekend, Minneapolis Fed Bank President Neel Kashkari suggested a single rate cut in December, contrasting with market expectations of two cuts by the end of the year, potentially in September and December.
Meanwhile, the US Dollar Index (DXY) maintained near six-week highs around 105.80, adding to the pressure on silver prices. Investors are now closely monitoring the upcoming US monthly Retail Sales data for May, expected to show a 0.3% growth following April’s flat performance.
The market remains attentive to economic indicators and Fed commentary, influencing silver’s trajectory amid fluctuating yields and dollar strength.
