Silver fell from its all-time high, as traders took profits after an eight-day rally deemed too fast and too far. Gold was little changed.

The white metal fell as much as 3.4% after the latest US jobs data did little to dent bets on interest rate cuts next week. Applications for unemployment benefits hit their lowest level in more than three years, indicating that companies are retaining workers despite the recent wave of layoffs.

Lower interest rates should theoretically boost precious metals, including silver and gold, as they don't pay interest.

However, silver's rapid rise to an all-time high of nearly $59 an ounce in recent days has pushed it into overbought territory, suggesting a price correction is imminent. "We don't think the pace of silver price gains we've seen this year is sustainable for the foreseeable future," said Ewa Manthey, commodity strategist at ING Bank.

Silver prices have nearly doubled this year, with most of the increase occurring in the past two months due to a historic supply crunch in the London benchmark market amid surging demand from India and silver-backed exchange-traded funds (ETFs). While that supply crunch has eased in recent weeks as more metal is shipped to the London market, other markets are experiencing supply constraints, with Chinese inventories at their lowest level in a decade.

Manthey said the main risk to his silver outlook comes from the industrial sector, which accounts for more than half of the metal's consumption. A sharper-than-expected global slowdown, particularly in the electronics or manufacturing sectors, would slow silver's momentum, Manthey said. Higher prices over a longer period could also lead to a decline in demand, he added.

However, ING Bank expects silver prices to remain well-supported amid a combination of resilient industrial demand, limited supply growth, and a more conducive macro environment.

"From a macro perspective, silver should benefit from the same drivers expected to support gold – a weaker US dollar, a Fed rate cut, and a return to safe-haven interest amid geopolitical concerns," Manthey said.

Following the release of the latest US jobs data on Thursday, swaps traders continued to expect a quarter-point rate cut at the Fed's December 9-10 meeting.

Spot silver fell 2.6% to $56.97 an ounce at 10:30 a.m. in New York. Gold was little changed at $4,207.13 an ounce. Platinum and palladium weakened. (alg)

Source: Bloomberg