Silver Sinks as 10-year US Treasury Yield Rises

iNVEZZ.com reported that the price of silver is currently “fluctuating around $19.341, down 0.65 percent intraday.” The white metal seems to be falling on the back of an increase in the 10-year US Treasury yield.

As quoted in the market news:

The 10-year note traded briefly at yield of 2.676 percent on Wednesday, which marked a one-week low for the benchmark. The 10-year yield has today returned above 2.7 percent, making silver appear a less attractive investment.

Historically precious metals have had a strong negative correlation with US real rates, meaning silver performs well when the difference between interest rates and inflation is declining. The traditional view is that higher real rates result in lower bullion prices because those yields reduce the appeal of non-yielding investments like precious metals.

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