US Treasury yields remain steady as investors await labor market data and the minutes of the December Federal Reserve meeting. The 10-year yield is at 4.697%, an eight-month high, while the 2-year yield is hovering around 4.304%.
Recent data showed stronger-than-expected vacancies and higher prices in the services sector, suggesting the Fed may keep rates steady for longer. The ADP report is expected to show 130,000 jobs in December, ahead of Friday’s nonfarm payrolls. Traders are looking for signs of a cooling labor market that could influence Fed policy and boost silver prices.
Stronger dollar weighs on silver
The dollar firmed after solid US data, dampening expectations for aggressive rate cuts from the Fed. The dollar index rose to 108.55, while the greenback hit a six-month high against the yen at 157.875.
The ISM non-manufacturing PMI climbed to 54.1, reflecting economic resilience, while input prices soared, signaling inflationary pressures. Markets now see a 95% chance that the Fed will maintain interest rates this month, with the first cut likely in July. A stronger dollar provides headwinds for silver, limiting gains.
Uncertainty about rates cancels out Silver’s appeal as a safe haven
Silver continues to draw support from the geopolitical risks associated with newly elected President Donald Trump’s tariff policies. Fears of trade wars and inflation have increased silver’s appeal as a safe haven. However, rising interest rates can limit profits, creating mixed signals for traders.