Silver Price Forecast: XAG/USD tumbles below $31.00 as US Dollar rebounds

Silver price trades in negative territory around $30.95 in Monday’s early European session, down 0.95% on the day.
The US economy added fewer jobs in June, and Unemployment Rate rose to its highest level since late 2021.
Fed’s hawkish stance or hotter-than-expected CPI inflation data might weigh on the white metal.

Lallalit Srijandorn FXStreet

Silver price (XAG/USD) edges lower to $30.95 during the early European session on Monday. The white metal declines on the back of renewed US Dollar (USD) demand and higher US bond yields. However, the precious metal’s losses might be limited by the rising bets on the US Federal Reserve (Fed) rate cuts this year.

The US employment report on Friday showed that employers added fewer jobs in June and that the Unemployment Rate rose to its highest level since late 2021, according to the US Bureau of Labor Statistics (BLS). The Nonfarm Payrolls (NFP) in the United States saw 206K job additions in June. The previous month saw a sharp downside revision to 218K from the initial reading of 272K. Meanwhile, the Unemployment Rate ticked higher to 4.1% in June from 4% in May.

The downwardly revised NFP and a further rise in the jobless rate suggested that strength in labour market conditions has eased further, prompting the expectation of Fed rate cuts in the third quarter. This, in turn, weighs on the US Dollar (USD) and creates a tailwind for the precious metal. A lower interest rate generally lifts the Silver price as it reduces the opportunity cost of holding non-yielding assets. Investors are now pricing in nearly 77% odds of a Fed rate cut in September, up from 70% before the US employment report, according to the CME FedWatch tool.

Investors will keep an eye on the Fed's Chair Jerome Powell’s testimony to the Senate Banking Committee on Tuesday ahead of the US Consumer Price Index (CPI) inflation data for June, which is due on Thursday. The hawkish stance from the Fed and hotter-than-expected CPI inflation data could dampen the rate cut speculation, which boosts the Greenback and exerts some selling pressure on the silver price.

(This story was corrected on July 8 at 08:06 GMT to say that the precious metal’s losses might be limited, not gains).

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.

AUD/USD remains depressed 0.7000, awaits FOMC Minutes

AUD/USD struggles to capitalize on its recent recovery move and trades with a negative bias below 0.7000 in Wednesday's Asian session. Amid geopolitical uncertainty, the US Dollar attracts some dip-buyers after a fresh leg up in US bond yields, keeping the pair under pressure despite hawkish RBA expectations. All eyes now remain on the FOMC Minutes.

USD/JPY holds firm near 158.50 ahead of Fed Minutes

USD/JPY hangs close to a one-and-a-half-week high near 158.50 in the Asian session on Wednesday, with bulls now awaiting a move beyond the 200-day SMA hurdle before positioning for further gains ahead of the FOMC Minutes. Meanwhile, a fresh leg up in US bond yields revives US Dollar demand amid geopolitical uncertainties, boosting the pair amid dovish BoJ commentary.

Gold trims losses, back above $4,100

Gold now manages to regain some balance, returning to the area above the key $4,100 mark per troy ounce following the closing bell in Europe on Wednesday. The yellow metal’s sharp pullback comes in tandem with marked gains in the US Dollar and a marked bounce in US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum and XRP fall liquidating $550M

Bitcoin’s correction follows a recent rejection due to supply around $87,200. Altcoins are generally in a correction trend, as Ethereum edges lower toward the next key support at $2,600 and Ripple extends its down leg near the $1.45 demand area.

Fed Minutes set to provide some insight into the timing of next rate hikes

The United States (US) Federal Reserve (Fed) will release the Minutes of September’s Federal Open Market Committee (FOMC) meeting on Wednesday. Investors are eager for some details that shed light on the extent and the timing of the central bank´s tightening cycle after approving the first interest rate hike in three years in September.

The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?

The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.