Silver and Gold Prices Plummet Amid Rising Yields and Stronger Dollar

Silver and gold futures suffered significant losses on Friday, with silver dropping as much as 9% and gold declining 3%. The sell-off was driven by rising Treasury yields and a strengthening U.S. dollar, which also triggered a broad stock market downturn.

Higher yields increase the opportunity cost of holding non-interest-bearing assets like silver, pushing investors toward Treasuries. The dollar's rally further pressured silver by making it more expensive for foreign buyers. Market sentiment soured further as expectations for Federal Reserve rate cuts faded following a hotter-than-expected Consumer Price Index report.

ANZ analysts Daniel Hynes and Soni Kumari noted, 'Inflation expectations, higher yields, and a stronger dollar are likely to keep gold under pressure near-term.' The bank added that strong consumer and producer price data has raised concerns about potential Fed rate hikes, which typically weigh on precious metals.