Silver Price Forecast: XAG/USD Slips Toward $60.50 as Oil Prices and Treasury Yields Surge

Last Updated on 29/09/2026

• Silver comes under pressure as higher oil prices fuel inflation concerns and strengthen expectations of additional Federal Reserve rate hikes.
• Rising oil prices, driven by stalled US-Iran nuclear negotiations, are also contributing to upward pressure on multi-year-high US Treasury yields.
• Markets are pricing in a 70% probability of an October rate hike, with investors awaiting key PCE inflation and US payrolls data for further clues on the Fed’s policy path.

Silver (XAG/USD) remains under pressure after falling more than 5% in the previous session, trading near $60.60 per troy ounce during Asian trading hours on Tuesday. The non-yielding precious metal continues to face selling pressure as uncertainty over US-Iran negotiations keeps oil prices elevated. Persistently high energy costs are raising concerns about inflation and increasing expectations that the Federal Reserve may need to maintain a tighter monetary policy stance.

Oil prices resumed their advance after Iranian officials cast doubt on the possibility of reaching a deal before the US midterm elections in November. The latest impasse came after US President Donald Trump rejected Tehran’s most recent proposal, slowing progress in diplomatic negotiations.

Higher inflation expectations and the prospect of further Fed rate hikes have pushed US Treasury yields to fresh multi-year highs, weighing on assets that do not offer interest income, including Silver. After the central bank delivered its first rate hike in three years earlier this month, money markets are now pricing in around a 70% probability of another increase in October.

OIS Curve Signals Expectations for Further Fed Tightening

Rabobank strategists noted that positioning in US interest-rate markets remains strongly tilted toward additional monetary tightening. According to the bank, the OIS curve indicates that investors continue to price in more than three Fed hikes through the end of next year. This suggests that, despite the Fed’s recent 25-basis-point rate increase, markets still expect the tightening cycle to continue for an extended period.

Investors will now turn their attention to upcoming US economic data for further clues about the Fed’s policy direction. Key releases scheduled for later this week include Wednesday’s Personal Consumption Expenditures (PCE) inflation report and Friday’s Nonfarm Payrolls data.