Silver Falls Sharply, Profit-Taking Fuels
Silver prices (XAG/USD) fell sharply on Friday (June 5th) and traded around US$68.90 per ounce, down around 6.7%. Selling pressure intensified after stronger-than-expected US jobs data boosted the dollar and led markets to reassess the Fed's potential to maintain tighter policy for longer.
The US Bureau of Labor Statistics reported that Nonfarm Payrolls (NFP) rose by 172,000 in May, with April's figure revised upward to 179,000. Markets had previously expected only 85,000 new jobs. The unemployment rate remained at 4.3%, while annual wage growth (Average Hourly Earnings) slowed to 3.4% from 3.6%.
The combination of a persistently strong job market and slightly easing wage pressures has investors adjusting their monetary policy expectations. According to CME FedWatch, the probability of a 25 bps interest rate hike in September rose to around 32% (from 23% the day before), while the scenario of at least one hike by December also strengthened to around 43%.
The US dollar also gained, with the DXY rising back towards the 99.80 area. A stronger dollar typically weighs on USD-denominated precious metals because it makes them more expensive for non-USD buyers, thus suppressing demand.
Meanwhile, market participants continued to monitor geopolitical developments in the Middle East, which typically maintain some hedging demand for precious metals. However, this session, the impact of US employment data and shifting interest rate expectations were the dominant factors.
Silver's decline also came after a bullish phase that brought prices near multi-year highs, triggering more aggressive profit-taking when the dollar rebounded. With volatility increasing heading into the weekend, silver's direction will now be highly sensitive to dollar-yield movements and whether the market re-increases bets on Fed tightening. (Arl)
Source: Newsmaker.id
