Silver prices rose in European trade on Friday for another session away from a two-month trough as US treasury yields slow down.

While hopes improve for Chinese demand as authorities continue to take measures to support the economy, as the central bank announced a surprise interest rate cut earlier this week.

Silver Prices Today

Silver prices rose 0.8% to $22.88 an ounce, with a session-low at $22.67, after rising 1.2% on Thursday, the first profit in five days away from a two-month trough at $22.22.

US Yields

US 10-year treasury yields tumbled 1.5% today away from a ten-month high at 4.312%, and on track for the first loss in seven sessions, in turn boosting non-yielding metals.

Investors now look forward to more reliable clues about the future path of US monetary policies. 

China's Economy

In a surprise step, the People's Bank of China cut one-year medium-term borrowing rates by 15 basis points to 2.50%.

It's the second interest rate cut in three months, in order to boost the weakening economy and especially the struggling real estate sector. 

Gold prices rose in European trade on Friday for the first time in five days away from five-month lows on short-covering.

Gold is on track for the third weekly loss in row, as dollar and US treasury yields rally following strong US data and bullish remarks by Fed officials. 

Prices Today

Gold prices rose 0.3% to $1,895 an ounce, with a session-low at $1,889, after losing 0.2% on Wednesday, the fourth loss in a row, plumbing a five-month low at $1,885 following strong US data. 

Weekly Trading

Across the week, gold prices are still down 1%, on track for the third weekly loss in a row.

Dollar

The dollar index scaled a two-month high on Thursday to 103.60, before dropping on profit-taking. 

Dollar's recent gains following a batch of strong data and bullish Fed remarks.

US Minneapolis Fed President Neil Kashkari said that while the Fed has achieved some progress in the battle against inflation, interest rates might still to rise again to finish the job.

US Yields

US 10-year treasury yields rallied to a ten-month high yesterday at 4.312%, marking the sixth daily profit in a row before a slip today on profit-taking.

Recent Fed minutes bolstered the case for another US interest rate by before the year end.

US Economy 

Recent US data showed retail sales rose past estimates in July, while factory output rose as well and unemployment claims fell.

Such data showcases the flexibility of the US economy, making the Fed's fight with inflation much easier, and allowing for more policy tightening without damaging the economy. 

Fed Minutes 

The latest Federal Reserve's meeting minutes showed that policymakers were still concerned about inflation and wanted more interest rate hikes if economic conditions didn't change.

The minutes also confirmed the prevailing view, that inflation is still far from the targets.

The meeting stated that as inflation remained above the targets and the labor sector remained tight, most policymakers supported more policy tightening.

The Fed decided at the July meeting to raise interest rates by 25 basis points to a 22-year peak.

US Rates

Following the release of the minutes, pricing for a 0.25% interest rate hike by the Fed at the September meeting rose to 14%.

While pricing for a 0.25% rate hike at the November meeting rose to 40%.

The SPDR

Gold holdings at the SPDR Gold Trust fell 6.93 tones yesterday to a total of 887.50 a tone, the lowest since January 2020. 

Sterling fell in European trade on Friday away from one-week high against dollar, on track for the first loss in four days after grim UK data.

The data renewed concerns about UK recession in the third quarter of the year, and hurt chanced of multiple more interest rate hikes by Bank of England this year. 

GBP/USD fell 0.25% to 1.2716, with a session-high at 1.2766, after rising 0.1% on Thursday, the third profit in a row, with a week high at 1.2788. 

Sterling marked such gains after strong UK inflation and wages data earlier this week, which bolstered the chances for a 0.25% BOE interest rate hike in September.

Grim Outlook

Earlier UK data showed retail sales fell 1.2% in July, missing estimates of a 0.6% decline. 

Retail sales represent nearly 70% of total GDP, renewing concerns about recession in the third quarter. 

UK Economy

Some global banks expect the UK economy to enter a recession in the second half of the year, led by the housing sector, which might force Bank of England to exact early interest rate cuts. 

JPMorgan analysts pointed to the worsening housing indices in the UK as inflation remains stubbornly high.

Such developments might change consideration for the UK monetary policies, in turn hurting the pound's standing against major rivals. 

Gold prices fell on Thursday as the dollar index rose against a basket of major rivals while US treasury yields rebounded.

Earlier data showed US unemployment claims fell by the fastest pace in five weeks, by 11 thousand to 239 thousand in the week ending August 12.

The Philly Manufacturing Index marked its first positive reading in a year at 12 points in August, up from minus 13.5 in July.

The latest Federal Reserve's meeting minutes showed that policymakers were still concerned about inflation and wanted more interest rate hikes if economic conditions didn't change.

The minutes also confirmed the prevailing view, that inflation is still far from the targets.

The meeting stated that as inflation remained above the targets and the labor sector remained tight, most policymakers supported more policy tightening.

The Fed decided at the July meeting to raise interest rates by 25 basis points to a 22-year peak.

US 30-year treasury yields just spiked to ten-month highs in another sign of trouble for gold.

Otherwise, the dollar index rose 0.1% as of 18:43 GMT to 103.5, with a session-high at 103.6, and a low at 103.06.

Spot gold prices fell 0.7%, or $13.5 as of 18:44 GMT to $1,914.80 an ounce.