
Silver price extends losses ahead of US employment report
The price of silver has declined so far in today’s trading session, extending its weekly drop.
The precious metal has remained under heavy downward pressure as the US dollar trades near 11-year highs on expectations of strong US employment data, along with a looming interest rate hike.
Silver for immediate delivery had shed over five cents, or 0.33 percent, to $16.13 per ounce as of 06:28 GMT, and was trading about four percent beneath its 50-day simple moving average of $16.82.
The precious metal has closed in the red during every session since the start of the week and is set for a 2.5 percent weekly drop, extending February’s 3.4 percent slip.
Silver settled 0.11 percent down yesterday after the European Central Bank (ECB) announced that it would start its more than one trillion euro quantitative easing programme on Monday.
Following the news detailing the economic stimulus measures, the EUR/USD fell to its lowest level in about 11 years, helping the DXY dollar index hit a fresh 11-year peak of 96.593 during yesterday’s session.
Demand for silver tends to ease with the strengthening of the US dollar as it makes dollar-denominated precious metals more expensive when converted into other currencies.
Silver prices have been further pressured by speculation ahead of today’s release of US nonfarm payrolls data for last month.
Reuters quoted Phillip Futures investment analyst Howie Lee as saying that any number showing that the US economy employed more than 250,000 in February would likely send precious metals “falling sharply and swiftly”.
The Bureau of Labor Statistics is scheduled to release the monthly employment situation report at 13:30 GMT.
The price of silver for May delivery had shed three cents to $16.15 an ounce as of 06:51 GMT. Scotiabank wrote in a report following the end of yesterday’s trading that the price of the precious metal was holding at support around the $16.10 area. The bank remains bearish on silver, expecting a retracement to this year’s low of $15.55.
Based on the two most actively traded COMEX contracts, with a total volume of trade in gold and silver of 14,858 contracts as of 06:51 GMT today, the gold:silver ratio was at 74.15. The ratio has risen about 1.3 percent since the start of the week.
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