Silver hovered near $66 an ounce Tuesday as rising Treasury yields and expectations for another Federal Reserve rate increase challenged a metal that just entered September with renewed investor interest. Spot silver slipped 0.2% to $66.42 by 0432 GMT, leaving traders focused on whether the $66 area can absorb selling before this week’s U.S. labor data reshapes the interest-rate outlook.
The immediate macro environment remains difficult for non-yielding precious metals. Markets are assigning a 66% probability to a Fed rate increase in September and an 89% chance of one by December following Chair Kevin Warsh’s hawkish Jackson Hole remarks.
Silver’s $66 Support Becomes the First Test for Bulls
Silver has stabilized after retreating from above $67.40, but price remains close enough to the recent lows to keep downside risk in focus. An intraday TradingView snapshot shared by Australian Gold Fund (@aus_goldfund) placed XAG/USD near $66.25, with price moving sideways after the sharp decline.
Silver XAG/USD $66 Support and Intraday Consolidation. Source: Australian Gold Fund (@aus_goldfund) on X
The consolidation around $66 may become an important short-term decision area. Buyers need to prevent a sustained breakdown beneath the recent floor and then reclaim the $66.80-$67 region before the immediate structure begins to improve materially.
Australian Gold Fund described the current pause as a contest between possible accumulation and another leg lower. That distinction will depend on confirmation: holding near $66 alone does not establish a reversal, while a recovery through the recent highs would show that buyers are regaining control.
A clean break below the support area would instead increase the risk of a deeper retracement following the August advance.
Gold-Silver Ratio Shows Silver Is Still Competing With Gold
Silver’s relative performance against gold adds another dimension to the outlook. The gold-silver ratio was around 66.7 using Reuters’ Tuesday spot prices of $4,428.54 for gold and $66.42 for silver, close to the roughly 66.3 level shown in a weekly TradingView setup shared by Winston Wolfe.
Gold-Silver Ratio Near 66 as Relative Trend Tightens. Image source: Winston Wolfe (@MrWWolfe) on X
Wolfe argued that the ratio was not strongly confirming the market’s increasingly hawkish Fed expectations. The ratio has remained well below its late-2025 highs in the supplied weekly setup, suggesting silver has retained substantial relative strength despite the recent pullback.
A falling gold-silver ratio generally means silver is outperforming gold, while a sustained rise would point to weakening relative momentum in silver. For XAG/USD bulls, keeping the ratio contained while silver holds the $66 area would strengthen the case that the current decline is consolidation rather than a broader reversal.
Rising Treasury Yields Put Pressure on Silver
The largest near-term threat comes from the bond market. The U.S. 10-year Treasury yield climbed to about 4.78% Tuesday, its highest level since early 2025, as renewed Middle East fighting pushed oil above $90 and increased concerns about inflation.
Higher yields raise the opportunity cost of holding silver, while higher energy prices complicate the Fed’s inflation outlook. The dollar, however, has received only limited support from the global rise in borrowing costs, offering precious metals some offsetting relief.
The next test arrives at 10 a.m. Eastern time Tuesday with the July Job Openings and Labor Turnover Survey. The August employment report follows Friday at 8:30 a.m. Eastern, giving traders two major opportunities to reassess September Fed expectations.
Silver’s Supply Deficit Keeps the Longer-Term Bull Case Alive
Silver’s fundamental backdrop remains supportive despite the near-term rate pressure. The Silver Institute’s World Silver Survey 2026 expects the market to post a sixth consecutive annual deficit, with the shortfall widening to about 46.3 million ounces. Total demand is forecast at roughly 1.11 billion ounces, while mine production is expected to remain broadly flat.
Industrial demand is projected to fall about 3% as photovoltaic manufacturers reduce silver usage, but demand tied to artificial intelligence infrastructure, automobiles and power-grid investment continues to provide structural support. Coin and bar investment is expected to rise 18% this year.
For silver, the immediate battle remains around $66. Holding that zone and reclaiming $67 would improve the short-term outlook, while a decisive break lower could extend the correction even as the persistent supply deficit supports a more constructive longer-term silver price forecast.
