- Silver prices jumped around Rs 15,000 in three sessions amid a weaker US dollar and volatile yields
- Silver Comex rose 2.47% to $70.59, spot silver gained 2.29% to $69.65 per ounce
- US 10-year Treasury yield fell two basis points to 4.69%, supporting precious metals gains
Silver prices have surged sharply over the past three sessions, with domestic prices jumping around Rs 15,000 as a weaker US dollar and volatile Treasury yields fuel renewed demand for precious metals. Silver Comex rose 2.47% to $70.59 per ounce, while spot silver gained 2.29% to $69.65 per ounce. On the domestic front, silver on the MCX rose 1.44% to Rs 2,46,751 per kg.
Gold also participated in the precious metals rally. Spot gold gained 1.51% to $4,584.93 per ounce, while MCX gold rose 1.24% to Rs 1,61,397 per 10 grams.
The latest rally in silver comes amid heightened volatility in global bond markets and renewed weakness in the US dollar. The Bloomberg Dollar Spot Index declined 0.3% on Friday, making dollar-denominated commodities more attractive to holders of other currencies.
Treasury yields also eased across the curve after a week of sharp swings. The 10-year US Treasury yield declined two basis points to 4.69%. Germany's 10-year yield fell one basis point to 3.25%, while Britain's 10-year yield declined two basis points to 5.04%.
The retreat in bond yields provided additional support to precious metals, which tend to benefit when yields fall as the opportunity cost of holding non-yielding assets such as gold and silver decreases.
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The latest move follows a turbulent week in bond markets, during which long-dated Treasury yields climbed to their highest levels in decades. Investors have been concerned about persistent inflation risks and rising government spending, putting pressure on sovereign debt markets.
The US Treasury subsequently stepped in to ease pressure on long-term borrowing costs. A surprise liquidity injection announced by the Treasury on Wednesday sent yields and the dollar lower, while simultaneously boosting bullion prices. Treasury Secretary Scott Bessent said on Thursday that he was prepared to expand buybacks of higher-cost debt. He also indicated that the administration would soon unveil a fiscal initiative aimed at addressing the elevated borrowing costs.
Although Treasury yields recovered part of their initial decline later in the week, the intervention has highlighted growing concerns over the sustainability of government debt and elevated fiscal deficits.
For precious metals, concerns around rising government debt have become an important part of the broader investment narrative. Gold has benefited from investors seeking alternative stores of value amid concerns over sovereign finances, while silver is increasingly participating in the move given its dual role as both a precious and industrial metal.
The combination of a weaker dollar, easing Treasury yields and heightened uncertainty around government borrowing costs has therefore created a favourable backdrop for silver.
The sharp increase in silver prices also comes after significant volatility in the metal in recent sessions. Investors are now watching whether the precious metal can sustain its momentum as global markets assess the next steps from the US Treasury and the outlook for interest rates, inflation and fiscal policy.
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