On Thursday, gold and silver prices declined on a stronger dollar in early European trading. The greenback hovered close to a two-month high and made the precious metals more expensive for investors using other currencies. Another factor that weighed on the metals is the benchmark 10-year U.S. Treasury yield that climbed to a three-week peak. Precious metals benefit from a dovish monetary policy because it pushes down government bond yields.

Spot gold is currently trading at $1,825.14 per ounce as of 0734 GMT, while spot silver is trading at $26.64 an ounce.

CMC Markets’ chief market strategist Michael McCarthy noted that the strengthening of the dollar is a major driver of precious metals’ prices. The rise in U.S. government bond yields also showed the central banks’ efforts to raise the interest rates. McCarthy added that it is becoming clear that the recent silver rally was largely based on speculation.

Lachlan Shaw, the head of commodity research at the National Australia Bank, added that another factor affecting gold prices is the strong economic recovery resulting from the vaccination. Thus, uncertainty in vaccine rollout and the emergence of new COVID-19 strains could be supportive of gold, he said. Yet another factor that weighs on precious metals is the recent rally of cryptocurrencies.

On the U.S. economy, private payrolls recovered more than expected in January. The ADP National Employment Report showed the addition of 174,000, which beats analysts’ prediction of only 49,000 jobs. The figures indicate the recovery of the labor market after shedding close to 80,000 jobs in December.

Cleveland Federal Reserve Bank President Loretta J. Mester commented that easy monetary policy can support the economy in the long term. But in the short-term, more fiscal aid is needed to carry the economy through the pandemic, she said.

Meanwhile, investors are waiting for the release of the policy decision of the Bank of England due today at 1200 GMT. The central bank is expected to focus on economic recovery and be cautious in supporting the use of negative interest rates as a stimulus weapon. The market will also be monitoring President Joe Biden’s $1.9 trillion COVID-19 relief plan. Democratic legislators have already made a move to pass the legislation without Republican support.