• Silver price plunges to near $72.40 as Fed officials warn of high inflation.
• Fed’s Schmid stated that the choice is between holding interest rates high or raising them further.
• Investors await the US NFP data for May.

Silver price (XAG/USD) is down 2% to near $72.40 during the Asian trading session on Friday. The white metal faces intense selling pressure as Federal Open Market Committee (FOMC) members have warned of high inflation pressures, and have guided that the choice is between holding interest rates at their current levels or raising them.

Theoretically, high Federal Reserve (Fed) interest rates bode poorly for non-yielding assets, such as Silver.

On Thursday, Kansas City Fed Bank President Jeffrey Schmid said during a fireside chat at the Bank of Kansas City Economic Forum, “The biggest risk facing the economy right now is inflation, and the big question now is whether the Fed should stay patient on rates or raise them to tamp this thing down and meet the inflation target.”

Meanwhile, investors await the US Nonfarm Payrolls (NFP) data for May, which will be published at 12:30 GMT. The US NFP report is expected to show that the economy created 85K fresh jobs, lower than 115K in April. The Unemployment Rate is seen steady at 4.3%. Average Hourly Earnings, a key measure of wage growth, is estimated to have cooled down to 3.4% Year-on-Year (YoY) from the previous reading of 3.6%.

Signs of strong job demand would force traders to raise hawkish Fed bets for the year; however, soft numbers would have a little impact on Fed market expectations as officials seem to be more concerned about high inflation.