Silver prices jump over 8% and gold extends gains as Treasury yields pull back

“Out of the two metals, silver was the most impressive…as yields fell on the back of [the Bank of England’s] temporary bond buying programme and disappointing U.S. ISM manufacturing PMI data,” said Fawad Razaqzada, market analyst at City Index and FOREX.com, in a market update.

The Institute for Supply Management’s manufacturing survey declined to a 28-month low of 50.9% inSeptember, from 52.8% in August.

The 10-year yield
TMUBMUSD10Y,
3.611%
was off nearly 16 basis points to 3.6387%. The ICE U.S. Dollar Index
DXY,
-0.15%,
a gauge of the dollar’s value against a basket of six rivals, also edged down by 0.2% to 111.934.

Rupert Rowling, an analyst at Kinesis Money, said silver has been rising due to expectations that it will be in “big demand” as the transition toward clean energy continues.

Meanwhile, analysts at Sevens Report Research said in a Monday research note that “the fundamental backdrop is getting less bearish” for gold “as Treasury yields and the dollar may be approaching a peak.”

However, “if we do not see a peak in yields and the buck,” investors should expect the precious metal to tumble to new lows, they said.

Downside risks remain for gold as “major central banks are expected to continue raising interest rates aggressively to combat surging inflation,” analysts at ICICI Bank wrote in a weekly update released Monday. U.S. Federal Reserve officials “stressed the need last week to keep hiking rates to restrictive levels amid persistent inflationary pressures, even at the risk of slower growth and further market volatility.”