Silver prices declined towards multi-week lows on Tuesday as rising bond yields weighed on the non-yielding metal.
Expectations of a more restrictive monetary policy stance in the United States have pushed Treasury yields higher, with the 10-year reaching 5%.
The Federal Reserve announces its decision tomorrow, with an interest rate increase widely anticipated and the outlook for the coming months remaining hawkish.
Any signs that further tightening lies ahead could keep yields elevated and place additional selling pressure on silver.
The risks extend beyond the United States. Persistent tensions in the Middle East have kept oil prices high, sustaining inflation concerns and reinforcing expectations that monetary policy will remain restrictive across major economies. The European Central Bank raised rates last week, while the Bank of Japan is expected to follow on Friday, adding to a challenging global rates backdrop for precious metals.
Industrial demand, however, could provide some support. Chinese industrial output rose more than expected in August, led by equipment and high-tech manufacturing amid continued investment in artificial intelligence-related technologies. Sustained strength in these sectors could support silver consumption.
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