Key Highlights

  • Silver traded above $69 an ounce on Monday, hovering at a two-month high.
  • The move followed the Treasury's unexpected ramp-up in Buybacks of longer-dated government debt.
  • Bond yields and the dollar fell, reviving the Debasement trade.
  • Threatened new US sanctions on Iran are raising the risk of further energy Supply disruptions.

Silver traded above $69 an ounce on Monday, hovering at a two-month high, as concerns over US Debt management and fiscal sustainability persisted after the Treasury unexpectedly ramped up buybacks of longer-dated government debt.

What Happened

The intervention pushed bond yields and the dollar lower, reviving the debasement trade and boosting silver's appeal as an alternative store of value.

Market Reaction

On the geopolitical front, threatened new US sanctions on Iran are raising the risk of further disruptions to Iranian oil supplies, potentially pushing energy prices higher and limiting the scope for interest-rate cuts.

Canada's planned retaliatory tariffs on some US goods after trade talks collapsed add to broader economic uncertainty.

Outlook

Investors will now focus on July PCE Inflation data and Fed Chair Warsh's Jackson Hole speech for further clues on the US rate outlook, both of which are likely to remain key catalysts for silver's near-term direction.