Silver gives back some gains as US yields rebound

Silver (XAG/USD) experienced a slight pullback on Thursday, trading near $66.70 following its recent gains. The decline was attributed to a decline in US Treasury yields from the previous day, although a modest rebound in yields on Thursday somewhat limited further upside. The US Treasury announced plans to double the maximum size of its liquidity-support buyback operations for longer-dated nominal securities starting in September.

The decision aimed to address rising US borrowing costs that had put pressure on the bond market. The announcement initially boosted Silver and precious metals despite the subsequent rebound in yields. However, yields rose back towards 5.23% for the 30-year US Treasury yield and hovered around 4.69% for the 10-year yield, which weighed on Silver's ability to extend its gains.

The broader decline in yields from recent highs also impacted the US Dollar (USD), which remained near a seven-week low. While lower yields and a weaker US Dollar generally support Silver, the Treasury's intervention did not fully alleviate concerns about US public finances. US national debt surpassed $40 trillion, and investors demanded higher compensation for holding longer-dated government bonds.

The Treasury's increased buybacks did little to address the underlying factors pushing yields higher, such as large fiscal deficits and elevated inflation expectations. Silver also faced headwinds from the monetary policy outlook, with many officials at the Federal Open Market Committee (FOMC) believing an interest rate hike might be necessary if inflation progress remained insufficient.

Investors now focused on upcoming US data, including the Philadelphia Fed Manufacturing Index and Initial Jobless Claims, as well as Fed officials' comments. Technical analysis indicated that XAG/USD traded at $66.78, maintaining a bullish near-term bias near the 100-period and 200-period SMAs at $65.21 and $65.08, respectively.

The Relative Strength Index (RSI) at 62.04 suggested sustained positive momentum after the latest advance. Resistance lay at $67.33, with support at $66.50, the 100-period SMA, and the horizontal floor at $65.10. Gold remained below $4,500, while Bitcoin gained momentum, inching closer to $72,000.