Silver on track for second weekly loss in row
Silver prices rose in European trade for the first session in four days away from two-month lows, with the white metal on track for the second weekly loss in a row as the dollar powers up.
Concerns are ongoing as well about the Chinese economy following a batch of weak data that shows recovery remains a long way down the road.
Silver Prices Today
Silver prices rose 1.3% to $23.80 an ounce, after losing 1.1% yesterday, the third loss in a row, marking a two-month low at $23.32 an ounce as most dollar-denominated metals decline.
Silver prices are down 0.75% so far this week on track for the second weekly loss in a row as the dollar muscles up.
The Dollar
The dollar hit two-month highs yesterday against a basket of major rivals amid prospects the Federal Reserve might raise interest rates by 0.25% in June.
US President Joe Biden and top Republican in the House of Representatives, Kevin McCarthy, asserted their commitment to reach a deal soon to raise the government debt level from $31.4 trillion.
A batch of recent data beat expectations, with US unemployment claims falling more than expected last week.
Such data shows the US labor sector remains rather tight, pressuring the Federal Reserve to extend policy tightening.
Such developments raised the prospect of a 0.25% rate hike by the Federal Reserve in June from 12% to 37%.
Chinese Demand
Recent Chinese data showed weaker factory output, retail sales, and investments last month, in a sign of weaker industrial activities, in turn hurting demand on silver.
Gold prices on track for the largest weekly loss since January as dollar strengthens
Gold prices rose in European trade for the first time in four sessions away from six-week lows, with the precious metal heading for the largest weekly loss since late January as dollar strengthens.
Dollar is boosted by optimism on fixing the US debt ceiling crisis, and following strong US data and bullish remarks by Fed officials, boosting the case for a 0.25% Fed rate hike in June.
Gold Prices Today
Gold prices rose 0.6% to $1,968 an ounce, with a session-low at $1,954, after losing 1.25% yesterday, the third loss in a row, plumbing six-week lows at $1,952.
Gold is down 2.1% so far this week, on track for the second weekly loss in row, and the largest since late January.
The Dollar
The dollar index rose 0.3% on Friday, maintaining gains for the fourth straight session and almost hitting two-month lows at 103.62 against a basket of major rivals.
A stronger dollar makes dollar-denominated gold futures costlier to holders of other currencies.
Dollar's gains come as US 10-year treasury yields spike with chances of a 0.25% Fed rate hike in June increasing.
US Debt Ceiling
US President Joe Biden and top Republican in the House of Representatives, Kevin McCarthy, asserted their commitment to reach a deal soon to raise the government debt level from $31.4 trillion.
A default on payments would be catastrophic for the US and global economy.
US Positive Data
A batch of recent data beat expectations, with US unemployment claims falling more than expected last week.
Such data shows the US labor sector remains rather tight, pressuring the Federal Reserve to extend policy tightening.
Fed Remarks
Federal Reserve member Philip Jefferson said on Thursday that inflation remains too high with the Federal Reserve still on the way to bring it down sufficiently.
Dallas Fed President Laurie Logan said she remains concerned about the high inflation rates, which impede any thoughts of pausing the current cycle of policy tightening.
Logan said that despite raising interest rates at the latest 10 meetings, she thinks it's still not the right time to pause rate hikes.
Saint Louis Fed President James Bullard said yesterday the Federal Reserve must raise interest rates as insurance against inflation.
Bullard said he expects inflation to slow down but by a slower pace than expected.
Chicago Fed President Austan Goolsbee said it remains too early to talk about interest rate cuts, while Cleveland Fed President Loretta Mister said that stubborn inflation might pave the way for further changes in interest rate pricing.
Minneapolis Fed President Neil Kashkari said that inflation remains too high in the US, with the country still facing a long road before reaching the 2% inflation targets.
Richmond Fed President Thomas Barkin said is inflation remained stubbornly high in the US, it's possible for the Fed to raise interest rates even more.
Fed Rates
Such aggressive remarks raised the prospect of a 0.25% rate hike by the Federal Reserve in June from 12% to 37%.
The SPDR
Gold holdings at the SPDR Gold Trust remained flat yesterday at 936.96 tones.
Wall Street climbs after positive data
Most US stock indices climbed on Thursday after a batch of positive data, and amid optimism about the US debt ceiling talks.
Reassuring Remarks
US President Joe Biden and top Republican in the House of Representatives, Kevin McCarthy, asserted their commitment to reach a deal soon to raise the government debt level from $31.4 trillion.
Data
Earlier US data showed unemployment claims fell to 242 thousand last week, while analysts expected a drop to 253 thousand from 264 thousand.
Dallas Fed President Laurie Logan said current data doesn't mean the Fed should pause raising interest rates.
Otherwise, banking stocks rebounded after Western Alliance reported an increase in deposits, in turn reducing concerns about the industry after multiple lenders collapsed since March.
On trading, Dow Jones stabilized at 33,421 as of 15:29 GMT, while S&P 500 rose 0.4%, or 15 points to 4,174, as NASDAQ added 0.8%, or 100 points to 12,600.
Oil prices decline under pressure from dollar
Oil prices fell in European trade on Thursday on track for the second loss in three days under pressure from stronger dollar against a basket of major rivals.
Prices are also pressured by official EIA data, which showed an increase in US crude stocks for a second week, in a negative sign for demand in the world's largest fuel consumer.
Global Oil Prices
US crude fell 0.6% to $72.24 a barrel, while Brent shed 0.5% to $76.32 a barrel, with a session-high at $76.94.
US crude rose 3% on Wednesday, while Brent added 2.9% on optimistic outlook for global demand from IEA.
The Dollar
The dollar index rose 0.5% on Thursday for the third session, hitting two-month highs at 103.38 against a basket of major rivals.
A stronger dollar weighs on dollar-denominated commodities as they become costlier to holders of other currencies.
Recent strong US data boosted the dollar, including a steep decline US unemployment claims last week.
Fed officials also reiterated their commitment to combat inflation until it's brought back to 2%.
US Stock
Official data from the Energy Information Administration showed an inventory buildup of 5 million barrels in the week ending May 12, while analysts expected a drop of 1.5 million barrels.
According to the data, total US stocks rose to 467.6 million barrels, the highest since the week ending April 7, in a negative sign of demand in the US.