Silver Price Forecast: XAG/USD drops to near $60.50 amid surging oil, Treasury yields

Silver price (XAG/USD) fell to near $60.50 amid surging oil prices and rising Treasury yields, according to a report on Tuesday. The precious metal experienced over 5% losses in the previous day and traded at $60.60 per troy ounce during Asian hours. Ongoing uncertainty surrounding US-Iran negotiations kept oil prices elevated, while the Federal Reserve (Fed) anticipated further tightening of monetary policy to combat inflation.

This pressure on energy costs heightens expectations for additional rate increases. US President Donald Trump's rejection of Tehran's latest proposal stalled diplomatic momentum. Rising inflation concerns and expectations of further rate hikes pushed Treasury yields to multi-year highs, affecting non-yielding assets such as Silver.

Analysts at Rabobank noted that market participants still anticipate more than three hikes by the end of next year, despite the Fed's recent 25 basis points hike. Investors are now watching upcoming US economic indicators, including the US Personal Consumption Expenditures (PCE) inflation report on Wednesday and the Nonfarm Payrolls report on Friday.

Silver is a precious metal commonly traded for its store of value and medium of exchange properties, along with its intrinsic value or as a potential hedge during high-inflation periods. Its price can be influenced by factors such as geopolitical events, interest rates, the US dollar's strength, investment demand, mining supply, and recycling rates.