XAG/USD falls near $66.00 amid rising Treasury yields and Fed tightening expectations fueled by surging crude prices.
Silver prices retreated to around $66.00 per troy ounce in Asian trading Tuesday, reversing two days of gains. The decline comes as rising oil prices stoke inflation fears, pushing Treasury yields higher and increasing bets on a Federal Reserve rate hike.
Market-implied odds of a 25-basis-point Fed rate increase in September rose to over 51%, up from 44.4% a day earlier, according to the CME FedWatch Tool. Geopolitical tensions, including uncertainty over a U.S.-Iran deal, have driven crude oil higher, adding pressure on non-yielding assets like silver.
Despite near-term headwinds, strong industrial demand—particularly from solar panel production and electrical grid upgrades—may support prices. Chinese imports of silver-bearing ores surged 62.5% year-over-year, underscoring robust physical demand.