Silver backs off two-week high ahead of US jobs data

Silver prices fell in European trade on Friday for another session, away from a two-week high on active profit-taking and under pressure from higher US 10-year treasury yields.

Recent strong US jobs data and bullish remarks by Fed officials bolstered the case for a 0.25% Fed rate hike in July. 

Now investors await US payrolls data later today, which will provide enough clues on the strength of the US labor sector and the health of the US economy in the second quarter of the year, and will help the markets price in the correct odds for the Fed's upcoming policy moves.

Silver Prices Today

Silver prices fell 0.45% to $22.62 an ounce, with a session-high at $22.77, after closing down 1.8% on Thursday, the first loss in five days away from a two-week high at $23.30.

US Yields

US 10-year treasury yields rose over 0.4% on Friday, maintaining gains for the sixth straight session and almost hitting a four-month high at 4.081%. 

Higher US treasury yields hurt the appeal of non-yielding precious metals such as silver.

Mixed Data

Mixed US data were recorded yesterday, with the economy adding far more private sector jobs than expected last month, with the services sector improving as well.

However unemployment claims rose last week with job opportunities declining in May.

Bullish Remarks

Dallas Fed President Lorie Logan said the decision to maintain interest rates unchanged at the June meeting was appropriate and that more interest rate hikes will be crucial to calm down the markets.

US Rates

Following the data and remarks, odds for a 0.25% Fed interest rate hike rose from 90% to 92%. 

US Payrolls

Now markets await the official payrolls report later today.

The US economy is expected to have added 224 thousand new jobs last month, down from 339 thousand in May, while unemployment is expected down to 3.6% from 3.7%, as average hourly earnings are expected up 0.3%.