Silver prices rose in European trade, resuming gains after a two-day hiatus on profit-taking, while now approaching five-week highs anew as the dollar index declines. 

Dollar's decline comes ahead of new US jobs data, which will provide important clues on the likely path ahead for the Federal Reserve monetary policies.

Silver Prices Today

Silver prices rose 0.65% to $24.44 an ounce, after closing down 0.7% yesterday, the second loss in a row on profit-taking off five-week highs at $25.02 an ounce.

The Dollar

The dollar index fell 0.1% on Friday, resuming losses against a basket of major rivals.

Chances of additional interest rate hikes by the Federal Reserve declined after a spate of weak US data this week, which hinted at a possible recession.

US Rates

Current odds for maintaining interest rates unchanged in September stand at 89%, while odds for maintaining interest rates in November stand at 56%. 

Jobs Data

Now investors await crucial data later today, including US payrolls report, which covers new jobs, average hourly wages, and unemployment. 

At 12:30 GMT, US non-farm payrolls data is expected to show the addition of 169 thousand new jobs in August, while unemployment is expected to settle at 3.5%.

The all-important US payrolls report will be released later today, crucial for gauging the health of the US labor market, and an important index relied upon by the Federal Reserve to decide its monetary policy.

The report shows the number of jobs added or lost by the non-farm sectors of the economy each month, in addition to the unemployment rate.

The report is particularly important now after a series of disappointing US data in recent days, which reignited concerns about US recession.

Such data hurt chances of another US interest rate hike at the September meeting, however chances are still serious for a hike at the November meeting.

Thus the important question now is, will the US payrolls report bolster the case for a November interest rate hike?

Grim Data

Recent US data showed job opportunities tumbled to 2-1/5 year lows in July while US consumer confidence slid as well in August.

Wednesday data showed US private sector added way less jobs than expected by market analysts.

However, Thursday data showed consumer spending stabilized in July, while unemployment claims fell for the third straight week.

US Rates 

Following the data, odds for a 0.25% Fed interest rate hike in September fell to 11.5%.

While odds for a 0.25% interest rate in November fell to 45% currently. 

The Payrolls Report

Naturally, strong US labor data today will once again bolster the case for a US interest rate hike in November.

Timing 

At  12:30 GMT, US non-farm payrolls data is expected to show the addition of 169 thousand new jobs in August, while unemployment is expected to settle at 3.5%.

Estimates

Obviously, strong labor data will bolster the case for a US interest rate hike in November, possibly past 60%. 

This it'll boost the dollar's standing against major rivals, and boost US treasury yields while hurting the stock market, and vice versa.

Euro fell in European trade against a basket of major rivals, extending losses for the second session against dollar and moving off two-week highs on profit-taking.

After European core inflation slowed down in August, doubt are now growing about whether the ECB will actually raise interest rates by 25 basis points next month,

The dollar on the other hand is extending its gains ahead of fresh US jobs data for August, which will provide fresh clues on the prospects of a new Fed interest rate hike this year.

EUR/USD fell 0.15% to 1.0828, with a session-high at 1.0854, after losing 0.75% yesterday, the first loss in four days on profit-taking off two-week highs at 1.0945, and following European inflation data. 

Across august, the common currency lost 1.4% against the dollar, the first monthly loss in three months on mounting concerns about European recession.

Core Inflation

As core consumer prices fell to 5.3% in August from 5.5% in July, inflationary pressures are declining on ECB policymakers.

Core consumer prices are the main measure used by the European Central Bank to determine inflationary pressures and monetary policies.

Markets are pricing in a 30% chance of an ECB interest rate hike at the September meeting, down from 40% last week.

The Dollar

The dollar index rose 0.1% on Friday, extending gains for the fourth straight session against a basket of major rivals.

Such gains came ahead of new important US payrolls data later today, which will provide important clues on the likely path ahead for the Fed monetary policies. 

Gold prices declined on Thursday as the dollar gained ground against most major rivals and following positive US data that pushed investors off gold futures.

As for data, US consumer spending rose 3.3% in July y/y, improving from a 3% increase in the previous reading. 

Spending remains considerably higher than Fed targets even if it's much lower than the 7% peak scaled in summer.

As for consumer spending, excluding energy and food, it  rose 0.2% in July.

Government data also showed unemployment claims fell 4 thousand to 228 thousand in the week ending August 26, the lowest in 4 weeks.

Otherwise, the dollar index rose 0.5% as of 17:50 GMT to 103.6, with a session-high at 103.7, and a low at 103.01. 

Gold spot prices fell 0.2%, or $4.80 as of 17:51 GMT to $1,968.3 an ounce.