Silver Price Forecast: XAG/USD attracts some buyers to near $41.00 as US NFP data looms

Silver price drifts higher to around $40.85, up 0.45% on the day.
Expectations that the US Fed will cut interest rates later this month support the Silver price.
Traders brace for the US August Nonfarm Payrolls report later on Friday.

Lallalit Srijandorn FXStreet

The Silver price (XAG/USD) attracts some buyers near $40.85 during the Asian trading hours on Friday, bolstered by the weaker US Dollar (USD). The white metal receives support from the prospect of the US Federal Reserve (Fed) rate cut this year. Traders await the release of the highly-anticipated US August Nonfarm Payrolls (NFP) report later on Friday for fresh impetus.

Data released on Thursday showed that the US Initial Jobless Claims increased more than expected last week. Additionally, the ADP National Employment Report revealed that US private payrolls increased less than expected in August.

These reports indicated softening labor market conditions, reinforcing the Fed rate reduction expectation. This, in turn, weighs on the US Dollar (USD) and lifts the USD-denominated commodity price. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding white metal.

Additionally, geopolitical tensions might contribute to the white metal’s upside, as it is considered a safe-haven asset. The US is looking to pressure buyers of Russian crude to push Moscow into agreeing to a truce in Ukraine. US Treasury Secretary Bessent said on Tuesday that the US "will be examining sanctions on Russia very closely this week" due to the ongoing war in Ukraine.

The US NFP report will be closely watched later on Friday. This reading could offer some hints about the US interest rate path. Economists forecast to see 75,000 job additions in August. In case of a stronger-than-expected outcome, this could boost the Greenback and drag the Silver price lower in the near term.

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

GBP/USD weakens below 1.3250 as UK Prime Minister Keir Starmer resigns

The GBP/USD pair loses ground to near 1.3245 during the early Asian trading hours on Tuesday. Political uncertainty in the United Kingdom continues to weigh on the British Pound against the US Dollar. The preliminary readings of the S&P Global Purchasing Managers Index from both the US and the UK are due later on Tuesday.

EUR/USD moves little amid market caution on ongoing US-Iran talks

EUR/USD steadies after registering modest losses in the previous day, trading around 1.1430 during the Asian hours on Tuesday. The currency pair remains locked in a tight range as traders closely monitor diplomatic developments surrounding ongoing talks between Washington and Tehran in Bürgenstock, Switzerland.

Gold holds lower ground near $4,150 on hawkish Fed bets

Gold struggles to capitalize on the previous day's modest gains and edges lower to near $4,150 in the Asian session on Tuesday. Firming expectations for a Fed rate hike and geopolitical uncertainties help the US Dollar to stand firm near its highest level since May 2025, undermining bullion.

NYSE parent ICE, OKX partners to expand tokenized equities and digital asset markets

The New York Stock Exchange parent company, Intercontinental Exchange, and crypto exchange OKX have formed a joint venture to develop infrastructure for tokenized and blockchain-native financial products, according to a statement on Monday. The venture will seek to operate as a US-registered broker-dealer and futures commission merchant, subject to regulatory approvals.

Are American consumers actually “resilient“?

A common label gets placed upon American buyers: resilient. Just last week, Marianne Lake, the CEO of Consumer and Community Banking — and a member of the JPMorganChase Operating Committee — affirmed this sentiment. While she did note some weariness regarding future inflation’s effect on consumers, she reiterated the common adjective: resilient.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.