- Silver prices fell to around $30.20 in European trading on Monday morning.
- The strong dollar and rising US yields are causing some selling pressure on the white metal.
- Safe haven claims may limit the downside to foreign exchange costs.
Silver prices (XAG/USD) traded around $30.20 in early European trading on Monday, attracting some sellers. The strengthening dollar and rising U.S. dollar yields are weighing on dollar-denominated stocks.
The Fed is expected to slow down on rate cuts this year amid rising economic risks in the U.S. and a strong U.S. economy that could push metals prices down in the near future. The U.S. Bureau of Labor Statistics (BLS) reported Friday that nonfarm payrolls (NFP) rose by 256,000 in December from the previous month, better than demand of 160,000. The unemployment rate also fell to 4.1% in December from 4.2% in November.
Friday, St. Louis Fed President Alberto Mussallem said more caution is needed in cutting interest rates and that there is a risk that inflation will be between 2.5% and 3% by December. The meeting increased.
Still, safe-haven flows from uncertainty surrounding President-elect Trump’s policies could help lower bond prices. Also, despite a 16% drop in physical investment, the economy’s needs, such as electricity, electric vehicles and solar panel deployment, are expected to push total demand to 1.21 billion ounces, supporting silver prices.
