Silver prices fell back on Friday, taking a lead from gold, as the markets reacted to data showing unexpected strength in the US economy.
Silver prices slumped as low as $22.42 an ounce on Friday afternoon, down from around $23.20 an ounce late Thursday, and reversing the previous day’s gains.
US data on Friday showed an unexpectedly large rise in jobs in January as well as separate figures showing that the unemployment rate came in slightly below expectations. The numbers pointed to a stronger-than-expected US economy in the first month of the year, raising the prospects of the US Fed holding interest rates at current elevated levels for longer. High interest rates create a negative factor for non-interest-bearing assets like precious metals.
The latest drop leaves silver prices in the middle of the range seen over the last four weeks, and still some way above the lows of around $22.00 an ounce seen on January 22.
Looking ahead, the markets will be watching out for the US ISM Services PMI data for January on Monday, which are likely to provide the latest pulse check on the health of the US economy.
Tuesday will also see the release of German factory orders for December, providing an indicator for the strength of the industrial sector in Europe’s powerhouse economy. Silver’s highly conductive, reflective and anti-bacterial properties make it a critical metal in the manufacture of a broad range of high-tech and industrial products.
Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.
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