- Silver price refreshes weekly high at $29.20 as weak US NFP data sends US yields down.
- The US NFP report showed that labor demand has slowed and wage growth has softened.
- Investors see the Fed pivoting to policy normalization in September.
Silver price (XAG/USD) posts a fresh weekly high at $29.20 in Friday’s North American trading hours. The white metal gains as US yields sink after the United States (US) Nonfarm Payrolls (NFP) report for July showed signs of cooling labor market conditions.
10-year US Treasury yields witness a bloodbath and dives to multi-month low near 3.82%. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, plunges below 103.30. Lower yields on interest-bearing assets bode strongly for the Gold price as they reduce the opportunity cost of investment in non-yielding assets.
The report showed that labor demand has softened as number of individuals hired by employers in July came in lower at 114K than estimates of 175K and June’s reading of 179K. The Unemployment Rate jumps to 4.3%, the highest since November 2021, from expectations and the prior release of 4.1%. The report clearly indicates that the labor market struggles to bear the consequences of higher interest rates by the Federal Reserve (Fed).
Meanwhile, Average Hourly Earnings have also grown at a slower pace, pointing to a slowdown in consumer spending that eventually cools down inflationary pressures. Annually, the wage growth measure decelerated at a faster-than-expected pace to 3.6%. While the labor market has cooled down, it will add to reasons prompting expectations of sooner rate cuts by the Fed. The Fed is widely anticipated to start reducing interest rates from the September meeting.
Silver technical analysis
Silver price breaks above the horizontal resistance plotted from June 13 low at $28.66 on a four-hour timeframe, which has become a support now. The asset climbs above the 50-period Exponential Moving Average (EMA) near $28.70, suggesting that the near-term trend is upbeat.
The 14-period Relative Strength Index (RSI) moves higher to near 60.00. If the RSI breaks above 60.00, the momentum will shift to the upside.
Silver four-hour chart
Silver FAQs
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.
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.
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.
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds steady above 0.6300; looks to US NFP for fresh impetus
AUD/USD stalls the previous day's pullback from the 0.6400 neighborhood, or over a two-week high, and oscillates in a range during the Asian session on Friday ahead of the US NFP. In the meantime, the USD struggles to lure buyers as Trump's sweeping tariffs lift recession fears, which might force the Fed to resume its rate-cutting cycle soon.
USD/JPY recovers slightly from multi-month low; upside seems limited ahead of US NFP
USD/JPY attracts some buyers during the Asian session on Friday and moves away from its lowest level since October set the previous day. Investors scale back their expectations that the BoJ would raise policy rate at a faster pace amid worries that Trump's new tariffs could negatively impact Japan's economy, which is seen weighing on the JPY.
Gold holds positive ground above $3,100, all eyes on US NFP data
Gold price recovers some lost ground to near $3,115 during the late American session on Thursday after facing some profit-taking in the previous session. Escalating concerns over a global trade war and ongoing geopolitical risks boost the Gold price, a traditional safe-haven asset.
Ethereum: Short-term holders may not impact ETH's price, Pectra mainnet upgrade set for May 7
Ethereum declined by 3% on Thursday as market participants continued to react to President Donald Trump's announcements regarding reciprocal tariffs. However, the selling pressure may not persist since most ETH short-term holders already sold their assets in March.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.