Silver prices rose in European trade on track for the first weekly profit since January as most precious metals gain ground on the back of the decline in US treasury yields. 

US yields stalled after a bearish statement by a Fed official, hurting chances of a 0.5% rate hike in March. 

Prices are also boosted by strong Chinese data this week that showed robust industrial activity, which could lead to higher demand on minerals. 

Prices Today

Silver prices rose 1.3% to $21.15 an ounce, with a session-low at $20.88, after losing 0.4% yesterday, the first loss in three days to near three-month lows at $20.41. 

Weekly Trading

Silver is up 1.9% so far this week on track for the first weekly profit in seven weeks. 

US Yields

US 10-year treasury yields fell 1.5% on Friday off four-month highs at 4.089%, on track for the first loss in four sessions on profit-taking. 

Weaker US treasury yields underpins non-yielding assets such gold and prices, with gold hitting two-week highs at $1,849. 

Fed Remarks

Atlanta Fed President Rafaael Bostic said the Fed will be in a position to end the current cycle of policy tightening by the middle of the year, and that he supports a 0.25% rate hike in March.

Fed Rates

Following such remarks, odds for a 0.5% rate hike fell from 31% to 27%, while odds for a 0.25% hike at least stood at 100%. 

Chinese Economy

Earlier data showed brisk industrial growth in China last month by the fastest pace since April 2012 after months of deterioration. 

As China's economy rebounds, demand on commodities and minerals is expected to improve as well.

Euro rallied in European trade after a hiatus from gains yesterday against dollar, on track for weekly losses following high inflation data in Europe.

The European Central Bank is now expected to increase interest rates by a rapid pace following the 0.5% expected rate hike in March, shrinking the current gap with US rates.

EUR/USD rose 0.3% to 1.0623, with a session-low at 1.0593, after losing 0.65% yesterday, following a 0.9% profit on Wednesday, the biggest profit in a month.

Euro is up 0.75% so far this week on track for the second weekly profit in three weeks on European interest rate prospects. 

Inflation Data

European consumer prices rose 8.5% in February, above estimates of 8.3%, and close to January's 8.6% rate.

German, French, and Spanish prices also rallied above estimates last month in a sign of continuous inflationary pressures in the continent. 

European Rates

Higher European inflation is expected to force the ECB to raise interest rates more aggressively and maintain euro zone yields high, in turn boosting influx of cash to the euro zone.

Minutes of the ECB February meeting showed that members support multiple more rate hikes by the central bank until neutral rates are reached.

ECB President Christine Lagarde asserted multiple more rate hikes might be needed following the planned 0.5% rate hike in March.

US stock indices were mixed today following data and speculation about the next policy steps from the Federal Reserve. 

Data

US unemployment claims fell once more to 190 thousand in the week ending February 25 from 192 thousand in the previous reading, and below estimates of 196 thousand.

Such data shows the US labor market remains tight and inflationary pressures remain strong.

The Fed 

The latest Federal Reserve meeting minutes showed policymakers don't view the latest slowdown in inflation as enough to stop policy tightening.

The minutes showed that inflation remains way too high above the 2% Fed targets as the labor market remains tight.

Following Friday's data, odds for an at least 0.25% Fed rate hike in March were 100%, while odds for a 0.5% rate hike rose from 27% to 33%.

On trading, Dow Jones rose 0.5% as of 16:08 GMT, or 165 points to 32,826, while S&P 500 shed 0.1%, or 3 points to 3,948, while NASDAQ gave up 0.4%, or 45 points to 11,334. 

Copper prices fell on Thursday as the dollar gained ground against most major rivals while markets assess upcoming monetary policy steps. 

Chinese Data

Industrial activities in China grew by the fastest pace since April 2012, holding in the growth zone for the second month in a row after three months of contraction.

China's manufacturing PMI rallied to 52.6 in February from 50.1 in January, beating estimates of 50.7.

China's GDP growth is expected between 5.5% and 6% this year, with infrastructure spending expecting to be a major engine of growth. 

Dollar

The dollar index rose 0.5% as of 15:39 GMT to 104.9, with a session-high at 105.1, and a low at 104.2. 

Analysts believe that recent data showed the US economy has fared much better than expected in 2033 so far and even entered an overheating zone.

The latest Federal Reserve meeting minutes showed policymakers don't view the latest slowdown in inflation as enough to stop policy tightening.

The minutes showed that inflation remains way too high above the 2% Fed targets as the labor market remains tight.

Fed member James Bullard stated the road remains long for inflation control.

On trading, copper futures due in May fell 1.6% to $4.09 a pound as of 15:36 GMT.