Silver's rally, one of its strongest months in years, stalled this week after global bond yields spiked to multi-year highs, pulling the metal back from its $66.5585-to-$66.8025 resistance zone. The reversal follows a near 10% surge triggered by a weak July jobs report, and traders now await the Fed's July minutes and Jackson Hole remarks for direction.
Silver dropped toward $64 on Tuesday after global bond yields spiked to multi-year highs on mounting concerns over government spending and persistent inflationary pressures. The US 30-year Treasury yield briefly touched a near 20-year high of 5.34% as investors weighed persistent inflation, higher oil prices and mounting government debt. Rising oil prices added to the unease, keeping inflation risks in focus even as rate-hike expectations continue to fade.
A rally built on a weak jobs report
The pullback follows one of silver's strongest months in years. The metal surged nearly 10% last week after July's Non-Farm Payrolls badly missed expectations, printing a loss of 23,000 jobs, prompting markets to price out any chance of a September Fed hike and reviving safe-haven demand. Beneath the volatility, silver continues to draw demand from the green energy transition, solar panels, electric vehicles and AI data centre infrastructure, which keeps a floor under prices.
Resistance holds, support zone in view
Silver has been rejected from its $66.5585-to-$66.8025 resistance zone, which has capped the metal since last week. The area between the 11 June low and the 6 July high, at $63.2765 to $61.5050, may offer support; if not, a deeper correction toward the 22 July high at $60.9365 could follow. On the XAG/USD chart, price is holding above the 0.382 Fibonacci retracement near 62.88, where the 200-period EMA sits nearby at 62.27. A confirmed break above the 66.73 high would signal the correction is over, while a break below the 0.382 retracement would expose the 0.5 level near 61.69 and, in a deeper slide, the 0.618 retracement around 60.49.
Traders are now watching the Fed's July meeting minutes and Chair Kevin Warsh's remarks at Jackson Hole for fresh clues on the path ahead for rates.
Sources: ActionForex, IG
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