Silver prices rose in European trade on Friday, moving off two-month lows for the fourth straight session.

The white metal is heading for the first weekly profit in 2024 as US treasury yields decline while actual demand in China is expected to rebound. 

Prices Today

Silver prices rose 0.3% to $22.98 an ounce, with a session-low at $22.80, after rising 1.1% on Thursday, the third profit in a row, away from a two-month low at $91.93. 

Weekly Trades 

Silver prices are up 1.5% so far this week, on track for the first weekly profit in five weeks. 

US Yields

US 10-year treasury yields fell 0.7% on Friday, underpinning non-yielding assets such as silver. 

The losses come before personal spending data for December, which will provide important clues on the status of inflation and the likely path ahead for US monetary policies. 

Chinese Demand

China's Central Bank announced this week a large cut in required local bank reserves in a step to add nearly $140 billion of liquidity to the market and boost performance. 

The bank said the cut, amounting to 50 basis points, of banking reserves, is the biggest in two years and will be effective starting February 5. 

Such a step could help boost demand on precious metals such as gold and silver. 

Gold prices fell in European trade on Friday, resuming losses and heading for the second weekly loss in a row under pressure from the stronger dollar.

Dollar's gains came as the odds of early US interest rate hikes faded, with traders awaiting crucial US  personal spending data, which is used by the Fed as an inflation measure. 

Prices Today

Gold prices fell 0.15% to $2,018 an ounce, with a session-high at $2,024, after rising 0.35% on Thursday away from a one-week trough at $2,009, as US yields slow down.

Weekly Trades 

Gold prices are down 0.75% this week, on track for the second weekly loss in a row.

The Dollar 

The dollar index rose 0.2% on Friday, maintaining gains for another session and approaching a six-week high at 103.82 against a basket of major rivals. 

The gains come following a stream of strong US data that showcased the strength and flexibility of the world's largest economy.

Strong Data

Recent data showed US manufacturing returned to growth unexpectedly in January after two months of recession, while the services sector expanded as well.

US GDP growth clocked in at a blistering 3.3% for the fourth quarter, beating estimates of 2.0%.

US Rates

Following the data, the odds of the first US interest rate cut at the Fed March meeting fell to 42%, while the odds for such a cut at the May meeting fell to 82%. 

US Personal Spending 

Now investors await US personal spending data for December, which is relied upon to gauge inflation in the country. 

The SPDR

Gold holdings at the SPDR Gold Trust remains flat yesterday to a total of 858.93 tonnes, the lowest since October 18. 

Euro fell in European trade on Friday against a basket of major rivals, sharpening losses for the second day against the dollar, plumbing six-week lows and on track for the second weekly loss in a row following the European Central Bank's policy meeting, which bolstered the case for an interest rate cut in April.

A string of strong US data conversely hurt the odds of early US interest rate cuts, especially in March and May.

EUR/USD

EUR/USD fell 0.3% to 1.0813, the lowest since December 13, after losing 0.4% on Thursday, the third loss in four days after the ECB's policy meeting, and strong US GDP growth data.

Weekly Trades

Euro is down 0.8% so far this week against the dollar, on track for the second weekly loss in a row amid renewed concerns about the interest rate gap between Europe and the US.

ECB

As expected, the European Central Bank voted to hold interest rates unchanged at 4.5% this week, the highest in 23 years.

The ECB said that current rates will help achieve the 2% inflation target if maintained for an extended duration. 

The ECB said that recent data indeed showed that inflation is declining in the medium term.

Lagarde

ECB President Christine Lagarde said it's still too early to talk about interest rate cuts in the euro zone, however she said that risks to growth are trending down. 

She asserted the ECB will rely on fresh data to decline the path ahead for policies, adding that a rate cut in the summer is possible. 

European Rates

Following Lagarde's remarks, the odds of an April interest rate cut by the ECB rose to 80%. 

Rate Gap

The interest rate gap between Europe and the US currently stands at 100 basis points, the lowest such gap since May 2022.

Recent strong US data delayed the timing of the first interest rate cut by the Federal Reserve, which threatens to widen the gap even further. 

Japanese university researchers from Osaka and elsewhere developed technology using machine learning to accelerate the discovery of necessary substances for green energy production.

Using the new method, researchers managed to create two new candidate substances for use into solid oxide fuel cells, which can be used to generate energy through clean hydrogen. 

According to the results published through Advanced Energy Materials, the method could be used to discover other substances four uses outside the energy sector. 

The research team behind the concept expressed their support for hydrogen fuel-cell technologies as carbon-neutral sources of energy, that need more development to be viable. 

Using machine learning to analyze the data structure of the substances needed to optimize and produce energy through hydrogen fuel cells was a genuine breakthrough that brought quick results. 

Researchers formed two promising substances, each with unique structures, and each has proved capable of contributing to energy production efficiently through fuel cells. 

However, practical applications of the method remains a bit far off, but the future is quite promising.