XAG/USD rallies as Treasury’s plan to double long-dated bond buybacks pressures USD and Treasury yields, boosting non-yielding assets.
Silver (XAG/USD) surged to a two-month high of $67.33 in Asian trading Thursday after the US Treasury announced plans to double buybacks of long-dated securities. The move triggered a sharp decline in Treasury yields, with 10-year yields falling over 1.5% and 30-year yields dropping nearly 2% from Tuesday’s close.
The US Dollar Index (DXY) slid to a seven-week low near 98.77, further supporting silver’s appeal as a non-yielding asset. Despite FOMC minutes hinting at potential rate hikes if inflation persists, lower yields on interest-bearing assets continue to drive demand for silver.
XAG/USD traded at $67.10, extending gains above its 20-period EMA of $63.20, with the RSI at 61.48 signaling positive momentum.