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%.
Gold prices edge up ahead of US jobs data
Gold prices rose in European trade for the first session in three days as demand spikes around the $1,900 barrier, and ahead of US payrolls data later today.
Such data 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 the markets price in the correct odds for the Fed's upcoming policy moves.
Gold Prices Today
Gold prices rose 0.3% to $1,916 an ounce, with a session-low at $1,909, after losing 0.25% yesterday, the second loss in a row as US 10-year treasury yields spiked to four-month highs at 4%.
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%.
The SPDR
Gold holdings at the SPDR Gold Trust remained flat yesterday at 917.86 tones, the lowest since March 15.
US crude stocks decline less than expected
The Energy Information Administration reported a drop of 1.5 million barrels in US crude stocks to 452.2 million barrels last week, while analysts expected a drop of two million barrels.
Gasoline stocks fell 2.5 million barrels to 219.5 million barrels, while distillate stocks fell a million barrels to 113.4 million barrels.
Wall Street declines over 1% after data
US stock indices declined on Thursday following bullish remarks by Fed officials and US data.
Fed Policies
Most Fed officials signalled further policy tightening to come, but in a slower pace compared to before, according to the Fed's latest meeting minutes.
Policymakers decided to maintain interest rates unchanged last month on concerns about economic growth, even as most members expect more interest rate hikes to come.
FOMC members expressed their concerns about inflation and employment rates, and preferred to take stock and pause policy tightening to monitor the situation.
The decision to pause policy tightening came as policymakers preferred to monitor the impact of policy tightening on the economy.
Otherwise, Fed Chair Jerome Powell said in his latest Congressional testimony that the road remains long before bringing inflation back towards 2%.
Earlier data showed US private sector added 497 thousand new jobs in June, the best since January 2022, and blowing through expectations of 226 thousand.
The previous reading registered an addition of 278 thousand, while revised down to 267 thousand.
US unemployment claims rose 12 thousand last week to 248 thousand from 236 thousand.
US trade deficit tumbled 7.3% m/m to $69 billion in May.
On trading, Dow Jones fell 1.4%, or 495 points to 33,794 as of 16:17 GMT, while S&P 500 shed 1.4%, or 61 points to 4,386, as NASDAQ gave up 1.6%, or 220 points to 13,570.