Better-than-expected economic data and persistently high inflation are prompting markets to revise their expectations for U.S. interest rates again, bringing the idea of a higher long-term federal funds rate back into the discussion.
According to the latest research from TD Securities senior commodity strategist Daniel Ghali, these conditions may continue to put pressure on the precious metals sector.
Ghali believes silver may be the best way to play the downtrend in precious metals. He added that a break below $20.80 would confirm the resumption of the downtrend.
Many analysts note that gold and silver are struggling as bond yields have risen significantly this month. The yield on 10-year bonds is currently 3.84%.
According to the CME FedWatch Tool forecast, in the first half of the year, federal funds rates will exceed 5%, and the decline will occur only by the end of the year.
