Silver Price Forecast: USD/JPY Breaks Below 68.50 Despite Devaluation Trade Resurgence

Silver spot extended its decline on Tuesday, falling for a second consecutive session, with the current price trading around $68.11 per ounce. The metal had previously pulled back sharply amid a stronger U.S. dollar and a reversal in market sentiment, briefly breaking below the $68.50 level. However, U.S. government intervention in the bond market has reignited currency devaluation trades, providing potential support for silver prices.

**Devaluation Trade Resurgence Offers Short-Term Support**

Market reports indicate that as the U.S. government implements intervention in the bond market, investor concerns over the purchasing power of fiat currencies have intensified once again, with capital refocusing on the store-of-value function of precious metals and other physical assets. This development may partially offset the downward pressure on silver from a stronger dollar, helping the metal find some respite around the $68 level. However, the strength of any rebound still depends on the subsequent trajectory of the U.S. dollar index and the actual market reaction to the intervention measures.

**Dollar and Rate Expectations Remain the Dominant Variable**

According to earlier reports from The Wall Street Journal, expectations of a Federal Reserve rate hike later this year had intensified, which previously weighed on assets including gold, silver, and bitcoin, with silver briefly breaking below the key psychological level of $60 per ounce. CPM Group analyst Christian also warned that if prices continue to decline, traders could engage in large-scale selling, and in the most bearish scenario, silver might test the $68 per ounce level. The current price is already near this level, leaving market sentiment relatively fragile.

**Focus Turns to Trading Momentum and ETF Holdings**

Analysts point out that whether silver can stabilize will depend on whether trading momentum cools and how silver ETF holdings evolve. If speculative capital continues to exit, silver prices could weaken further; conversely, if devaluation trades continue to build, silver may attract renewed safe-haven buying. Overall, the battle around the $68 level in the near term will determine the metal's next directional move.