Silver tumbles two percent as dollar strengthens

Silver futures fell two percent in American trade as the dollar index rose following a basket of data and developments from the US, the world's largest economy, as Federal Reserve Bank of Minneapolis President Neel Kashkari spoke in Washington. 

As of 06:22 GMT, silver futures due on December 15 fell 1.73% to $16.840 an ounce from the opening of $17.137, while the dollar index rose 0.28% to 94.95 from the opening of 94.69. 

Earlier US data showed the unemployment rate fell to 4.1%, the lowest since early 2001, and compared to 4.2% in September, while average hourly earnings steadies at zero from 0.5%, missing expectations of 0.2%. 

The economy created 261 thousand new non-farm jobs in October, up sharply from 18 thousand in September, while still missing expectations of 312K, as the trade deficit rose past expectations of $43.5 billion from $42.8 billion in August. 

The ISM services PMI rose to 60.1 in October, the best since October 2015, from 59.8 in September, besting expectations of 58.5. 

US President Donald Trump nominated Federal Open Market Committee member Jerome Powell to be the next Federal Reserve Chair after current occupant Janet Yellen ends her term next February. 

 Otherwise, the Federal Reserve voted to hold overnight interest rates unchanged at between 1.00% and 1.25% for the third meeting in a row on Wednesday. 

Fed policymakers pointed to strong US growth and improvement in the labor sector as the harmful impact of recent hurricanes fades, while asserting the path of normalizing the balance sheet, which started in October. 

Otherwise, the Committee will gradually give up the current policy of reinvesting its holdings of debt, mortgage-backed securities, and treasury bills and selling them in public auctions to trim them down from their current high levels in the long term, and in order to keep the financial conditions accommodative.

The Committee announced previously its plan to cut its monetary holdings gradually by reinvesting them through the open market system, while expecting the treasury bill sales to reach $6 billion at the start of the process, while rising to $30 billion a month in 12 months.

As for mortgage-backed security sales, they will start at $4 billion and advance to $20 billion a month after a year of the process.