Spot silver rose 1.3% on August 21 to $68.93 per ounce, and along with gold, platinum, and palladium, is poised to record a weekly gain. The common driver for precious metals that day came from a weakening U.S. dollar and changes in long-term U.S. Treasury yields. Silver also benefited from both safe-haven demand and its industrial properties.
The dollar weakened this week, making dollar-denominated precious metals cheaper for overseas buyers. U.S. Treasury Secretary Bessent indicated that the government might further expand the scale of treasury bond repurchases. The Treasury Department had previously announced that the repurchase size for each long-term securities operation next quarter will double to at least $4 billion. The buyback news pressured long-term yields lower and also reignited market discussions about monetary purchasing power and asset allocation.
Interest rate expectations remain a key variable for silver going forward. The latest data showed a decline in U.S. initial jobless claims last week, indicating the labor market remains stable after an unexpected dip in July employment. Traders currently estimate a 63% probability that the Federal Reserve will keep interest rates unchanged next month, with a 37% probability of a rate hike. Higher interest rates increase the holding cost for non-yielding assets; if yields continue to decline, the relative attractiveness of silver will increase.
Geopolitical risks also provide support. The United States stated it will impose stricter sanctions on Iran, keeping energy and inflation uncertainties elevated. Silver is both a precious metal and widely used in photovoltaics, electronics, and high-end manufacturing, meaning its price reflects both safe-haven buying and industrial demand expectations.
In the short term, the rapid rise near $68.93 may lead to profit-taking, but the dollar, bond yields, and the geopolitical situation still lean supportive. Investors need to continue monitoring Federal Reserve commentary, U.S. inflation data, and whether industrial demand can keep pace with the price increase.
