Silver Price Forecast: Silver/USD Eyes $67 as US Yields Slide

Silver staged a reversal on Wednesday, surging over 5% in a single day to return to the $66.83 level. The catalyst came from the US Treasury market: long-term Treasury yields pulled back slightly after hitting their highest levels since 2007, combined with US Treasury measures to limit upside in long-end yields, which directly lowered the opportunity cost of holding precious metals and drove funds back into silver.

**Treasury Yield Pullback Releases Rebound Room**

Earlier, persistently rising Treasury yields had weighed on non-yielding assets like silver. As long-end yields retreated from multi-year highs, silver's appeal quickly recovered. Market reports indicated that US Treasury intervention eased bond market selling pressure, providing a critical breathing window for precious metals. Silver rallied sharply from its intraday low of $62.19, with a significant rebound magnitude, reflecting the market's sensitivity to shifts in rate expectations.

**Institutions Warn of Long-Term Risks Alongside Short-Term Support**

Despite the sharp short-term rally, multiple institutions remain cautious on silver's outlook. Bank of America's analyst team noted that silver's industrial demand is facing structural shifts—while sectors like photovoltaics still provide support, high silver prices could curb consumption. The bank is optimistic about silver reaching $100 in the fourth quarter but warns the rally is unlikely to be sustainable. Jeffrey Christian, Managing Director at CPM Group, said that if prices continue to decline, traders could sell off en masse, with silver potentially falling to $68 in the most bearish scenario. Citi's baseline scenario projects a silver target of $70 over the next 6 to 12 months, implying room for a pullback from current levels.

**Fund Positioning Intensifies Short-Term Volatility**

Current silver market positioning is crowded, with a relatively high share of short-term speculative funds. Once the macro environment stabilizes, profit-taking pressure could accelerate. On the technical front, silver's RSI indicator had previously risen to extreme overbought territory above 85, coupled with MACD bearish divergence signals, making near-term correction needs hard to ignore. However, inflation concerns, dollar movements, and geopolitical risks could still drive funds into safe-haven assets like silver, providing reasons for repeated price fluctuations.