Silver sharpens decline to three-month trough as US yields surge
Silver prices fell in European trade for the fifth straight session, plumbing three-month lows and heading for the fifth weekly loss in a row as US 10-year treasury yields rally anew.
Recent strong US data bolstered the case for an extended campaign of interest rates hikes by the Federal Reserve as the economy showed flexibility.
Prices Today
Silver prices fell 1.9% to $21.17 an ounce, the lowest since November 29, with a session-high at $21.58.
Silver prices lost 0.2% yesterday, the fourth loss in a row as the dollar muscled up against major rivals.
Weekly Trades
The white metal remains down 3.75% this week on track for the fifth weekly loss in a row, the longest such streak since May 2022.
US Yields
US 10-year treasury yields rose over 1.5% today on track to hit a three-month high at 3.927%, and almost trading above 4% once more.
A spate of strong US data bolstered the case for multiple more Fed rate hikes this year and raised estimates for neutral interest rates from 5.25% to 6%.
Fed Remarks
Multiple Fed policymakers said this week there's a need to more rate hikes until inflation is brought back to 2%.
Cleveland Fed President Loretta Mister said there's enough cause to raise interest rates by a 0.5% once more, with similar statements from Saint Louis Fed President James Bullard.
Fed Rates
Pricing for a 0.25% rate hike by the Fed in March now stands at 100%, while pricing for a 0.5% rate hike in March rose from 9% to 15%.
Pricing for a 0.25% hike in May rose to 77%, while pricing for a 0.5% hike rose from 9% to 17%.
Gold falls to 2023 lows as dollar strengthens
Gold prices fell on Friday to 2023 lows, or seven-week lows, on track for weekly losses as dollar strengthens on expectations the Fed will continue raising interest rates for a longer period this year.
Such bets were increased after a batch of strong US data, which showed continued flexibility for the economy and assuaged concerns about recession.
Gold Prices
Gold prices fell 1% to $1,818 an ounce, the lowest since December 2022.
Prices are down 2.5% so far this week, on track for the second loss in three weeks as dollar climbed alongside US treasury yields while demand fell on non-yielding assets.
The Dollar
The dollar index rose over 0.4% today to six-week highs at 104.54 against a basket of major rivals.
Dollar's advance makes dollar-denominated gold contracts costlier to holders of other currencies.
US 10-year treasury yields rose over 1.5% today on track to hit a three-month high at 3.927%, and almost trading above 4% once more.
A spate of strong US data bolstered the case for multiple more Fed rate hikes this year and raised estimates for neutral interest rates from 5.25% to 6%.
Fed Remarks
Multiple Fed policymakers said this week there's a need to more rate hikes until inflation is brought back to 2%.
Cleveland Fed President Loretta Mister said there's enough cause to raise interest rates by a 0.5% once more, with similar statements from Saint Louis Fed President James Bullard.
Fed Rates
Pricing for a 0.25% rate hike by the Fed in March now stands at 100%, while pricing for a 0.5% rate hike in March rose from 9% to 15%.
Pricing for a 0.25% hike in May rose to 77%, while pricing for a 0.5% hike rose from 9% to 17%.
The SPDR
Gold holdings at the SPDR Gold Trust remained flat yesterday at a total of 921.08 tones, the highest in a week.
Euro sharpens decline to six-week low on Fed interest rate prospects
Euro declined in European trade for the third straight session against dollar, plumbing six-week lows and heading for the third weekly loss in a row on concerns about increasing policy gap between the US and Europe.
The dollar extended its gains on prospects of multiple more rate hikes by the Federal Reserve this year after a batch of strong US data.
EUR/USD fell 0.4% to 1.0629, the lowest since January 6, after closing down 0.15% yesterday following US data.
Weekly Trading
Euro is down 0.5% so far against dollar on track for the third weekly loss in a row amid renewed concerns about a wider US-Europe policy gap.
European Rates
The European Central Bank was clear in February about another 0.5% rate hike in March, and probably more in later months without specifying the amounts.
ECB President Christine Lagarde said she's waiting for fresh inflation data to gauge the next steps for the ECB accurately.
European inflation declined in January for the third straight month, hitting May 2022 lows and reducing pressures on ECB policymakers.
The Dollar
The dollar index rose 0.4% on Friday for the third straight session, hitting six-week highs at 104.49 against a basket of major rivals.
Such gains came following upbeat US data that increased pressure on the Fed to keep tightening policies and raising rates for months to come.
Pricing for a 0.25% rate hike by the Fed in March now stands at 100%, while pricing for a 0.5% rate hike in March rose from 9% to 15%.
Pricing for a 0.25% hike in May rose to 77%, while pricing for a 0.5% hike rose from 9% to 17%.
