Silver Slumps to $60.71 Amid Refining Backlogs and Soft Payroll Print
Silver's front-month contract closed at $60.71 an ounce on the COMEX Friday, marking the end of a difficult week for the metal.
The price decline of 6.2% over seven days and fall below its 50-day moving average of $65.51 came despite two macroeconomic releases that should have been favorable to bullion.
The September nonfarm payrolls report underwhelmed, adding only 29,000 jobs outside agriculture, against a predicted 90,000, while the unemployment rate rose to 4.2%. The market initially trimmed bets on another Federal Reserve rate hike in October and the dollar softened, briefly lifting precious metals.
However, yields on US Treasuries remained high, making non-yielding assets less attractive. Higher real US rates and carrying costs are the main drag on silver pricing, according to JKCM. Allocators have little incentive to hold a metal that pays nothing to hold as long as government paper offers an attractive risk-free return.
The week's inflation data added ambiguity, with the PCE price index for August rising 0.3%, and core measure up 0.2%. Both readings undershot consensus. New York Fed President John Williams remarked that policymakers felt no need to rush further rate adjustments.