Silver slides as a rebound in yields supports a stronger US Dollar
Silver bulls are suffering losses Monday as the strong US Dollar and rising US yields reduce demand for precious metals.
XAG/USD is falling toward the psychological support level of $36.00 at the time of writing. Intraday losses for the white metal are currently approaching the 1.60% mark.
The decline in the Silver price has primarily been due to the recovery in the value of the US Dollar. Treasury yields and renewed hope in the world trade negotiations are prominent drivers of current price action.
Traders have also welcomed the recent comments by President Donald Trump, who stated that trade negotiations with key trading partners are “going well” prior to the July 9 tariff deadline.
This has encouraged investors to move away from safe-haven assets, such as Silver and Gold.
Additionally, Germany released its May Industrial Production data, which showed an annual increase of 1% (up from a 2.1% contraction in April). The monthly figure increased 1.2%, while markets had anticipated it to remain unchanged.
Additionally, China’s foreign exchange reserves for June came in at $3.317 trillion, slightly above consensus expectations, which supports a more stable macroeconomic backdrop.
Alongside that pressure southwards was the realignment in the Federal Reserve's (Fed) monetary policy stance in reaction to Thursday’s better-than-expected US Nonfarm Payrolls (NFP) data.
These data points have reinforced investor confidence in global economic growth, reducing the demand for traditional safe-haven assets.
Source: FXstreet
