However, yields were are rising in response to inflation concerns. If inflation increases, silver and other physical assets may provide a hedge or safeguard purchasing power.
TD Securities has also pointed out that the silver market may currently be too bearish and may produce potential upside, especially if industrial demand improves and forces short sellers to cover their trades.
“With money-manager positioning still hovering around extreme lows, silver continues to reflect extremely bearish sentiment across the speculative community,” TDS told Kitco. “But while silver’s industrial luster gives it a boost and as the precious-metals environment improves amid a flat yield curve, shorts could very well be forced to cover. In fact, with prices trading right below key resistance levels, price action in the coming weeks could lead to a sharp short-covering rally.”
For more information on the silver market, visit our silver category.