US Treasury yields and the US dollar surge, suppressing safe-haven demand; gold and silver experience sharp corrections as market sentiment weakens

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During the Asian and European trading sessions on Monday, OCBC Bank’s foreign exchange strategist Christopher Huang stated that both gold and silver have recently seen significant pullbacks, with the core reason being the rapid rise in U.S. Treasury yields and the

putting pressure on safe-haven demand for precious metals. In the latter part of last week, the price of gold plunged nearly 2.5%, falling toward the $4,500 area, while silver dropped even more sharply, plummeting about 9% at one point during intraday trading and breaking below the $76 level.

　　

Market analysis suggests that the continuous rise in international crude oil prices has reignited global inflation concerns, which is an important reason for the recent shift in market logic. Due to lingering transportation risks in the Strait of Hormuz, concerns over tight supply in the international energy market have been intensifying. Rising oil prices have prompted the market to reprice in “higher rates for longer” expectations, which has further driven up U.S. Treasury yields.

Meanwhile,

continues to climb, driven by safe-haven demand and rate differentials, which has also weakened the appeal of precious metals. For gold and silver, since they are interest-free assets, investors tend to favor higher-yielding dollar-denominated assets when market interest rates rise, leading to capital outflows from precious metals.

OCBC Bank pointed out that silver’s decline in this wave was clearly greater than that of gold, primarily because silver’s previous rally was driven by “high-beta risk trades.” Earlier, growing optimism for industrial metals, the new energy sector, and AI-related investments pushed silver prices to surge. However, when market risk appetite cooled, silver’s volatility was typically higher than gold’s, resulting in even greater selling pressure during this correction.

　　

Although ongoing tensions in the Middle East theoretically favor gold’s safe-haven demand, rising oil prices have led to increased inflation expectations, making the market more concerned that the Federal Reserve may stick to high rates or even hike further. Thus, the precious metals market is shifting from a “geopolitical risk hedge” to a “high-rate suppression trade.”

　　

From a technical analysis perspective, gold has clearly broken below short-term moving average support on the daily chart. The previously strong uptrend is transitioning into high-level consolidation. OCBC noted that gold is currently trading near $4,540, with the daily RSI having retreated markedly, indicating that previous strong upward momentum is fading. The first key support below is around $4,452, which corresponds to the 23.6% Fibonacci retracement from the high and low of 2026. More important medium- and long-term support is near the 200-day moving average at around $4,340. On the upside, resistance is now at $4,670, which matches both the 21-day moving average and the 38.2% Fibonacci retracement. The $4,730 and $4,850 regions correspond to the 50-day moving average and the 50% Fibonacci retracement, respectively.

Looking at the 4-hour chart, gold has already formed a clear short-term downward channel. The MACD remains below the zero line, while the RSI is near the weak area, showing that bearish sentiment still dominates. However, since gold is approaching an area of technical support, a short-term technical rebound is possible. But if the dollar and Treasury yields stay strong, any gold rebound may be limited.

Editor’s summary:

The gold and silver markets are currently facing triple pressure from “high rate expectations,” “a strengthening dollar,” and “energy-driven inflation worries.” While geopolitical risks remain, market logic has shifted to focus on the Fed’s future policy path and changes in U.S. Treasury yields. At the same time, silver’s previously high-risk beta trades resulted in a significantly deeper pullback compared to gold this round. In the short term, the precious metals market is likely to remain highly volatile, while the dollar, U.S. Treasury yields, and changes in the Strait of Hormuz situation will continue to dominate market direction.

Editor: Zhu Henan