Silver (XAG/USD) falls on Friday and trades around $68.90 at the time of writing, down 6.74% on the day.
The white metal is under heavy selling pressure after a stronger-than-expected US employment report boosted the US Dollar and reinforced expectations of a more restrictive Federal Reserve (Fed)
The Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by 172K in May, following an upward revision of April’s figure to 179K. Market expectations were for only 85K new jobs. Meanwhile, the Unemployment Rate remained unchanged at 4.3%, while annual wage growth, as measured by Average Hourly Earnings, slowed to 3.4% from 3.6% previously.
This combination of a resilient labor market and moderating wage pressures supports the US Dollar (USD), as investors adjusted their expectations for monetary policy. According to the CME FedWatch tool, markets now see roughly a 32% chance of a 25-basis-point rate hike by the September meeting, up from only 23% a day earlier, while at least one rate hike by December is now the favorite scenario with a chance of 43%. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, advances after the data release and climbs back toward the 99.80 area.