Silver bounces back to $34 on safe-haven bid

The price of Silver (XAGUSD) rebounds strongly above $34.00 in Thursday’s European session after declining to near $33.40 on Wednesday.

The white metal recovered as US bond yields tumbled after a sharp rally in the past few weeks. 10-year US bond yields plummet to 4.19%, down 1.28% at the time of writing.

Lower yields on interest-bearing assets reduce the opportunity cost of holding an investment in non-yielding assets, such as silver.

Meanwhile, the US Dollar has also faced a slight correction after a sharp rally.

The DXY Dollar Index, which tracks the greenback’s value against six major currencies, slides to near 104.15 after posting a fresh 12-week high around 104.50 on Wednesday.

The outlook of US yields and the Greenback remains firm as investors expect the Federal Reserve to follow a moderate interest rate cut cycle. According to the CME FedWatch tool, the US central bank is expected to cut interest rates by 25 basis points in November and December.

In Thursday’s session, investors will focus on the flash US S&P Global PMI data for October.

Silver price remains well-supported due to uncertainty over the US presidential elections, which are coming in less than two weeks, and escalating Middle East tensions.

The scenario of geopolitical and political uncertainty bodes well for precious metals, such as silver, as investors use the asset as a hedge in risky market conditions.

XAGUSD chart by TradingView