Select Language

Silver rebounds after weak US jobs report fuels Fed rate cut speculation

Breaking news

Silver rebounds after weak US jobs report fuels Fed rate cut speculation

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.08.02 01:33
Silver rebounds after weak US jobs report fuels Fed rate cut speculation

update 2025.08.02 01:33

  • Silver reverses early losses on Friday after the Nonfarm Payrolls report came in below expectations.
  • The July NFP report showed that the US economy added just 73,000 jobs, well below the 110,000 forecast.
  • The US Dollar weakens across the board after soft economic data raised expectations of a Fed rate cut in September.

Silver (XAG/USD) reverses early losses on Friday and climbs back above the $36.50 mark, buoyed by a broad-based sell-off in the US Dollar (USD) after the latest Nonfarm Payrolls (NFP) report surprised to the downside.

The July Nonfarm Payrolls (NFP) report delivered a significant downside surprise. The US Bureau of Labor Statistics reported that the US economy added just 73,000 jobs, well below the 110,000 expected. Adding to the dovish tone, June's payrolls were revised sharply lower to 14,000 from a previously reported 147,000. The Unemployment Rate ticked higher to 4.2%, in line with forecasts, while wage growth remained steady, with Average Hourly Earnings rising 0.3% MoM and 3.9% YoY. The Unemployment Rate ticked up to 4.2% in July, matching expectations and rising slightly from 4.1% in June.

In the manufacturing sector, the S&P Global Manufacturing PMI (Final) rose slightly to 49.8 in July, beating expectations of 49.7 and improving from 49.5 previously. However, the more closely watched ISM Manufacturing PMI fell short of forecasts, dropping to 48.0 from 49.0, signaling ongoing contraction in factory activity.

The softer-than-expected US jobs data triggered a sharp decline in US Treasury yields and reignited speculation that the Federal Reserve (Fed) could begin cutting interest rates as early as September. This shift in sentiment weighed heavily on the Greenback, boosting demand for non-yielding assets like Silver. According to the CME Fed watch tool, markets are now pricing in an 82% probability of a rate cut at the Fed's September meeting -- a steep surge from just 37% prior to the release -- as traders reassess the central bank's policy path in light of the cooling labor market.

From a technical standpoint, the intraday rebound in Silver offers some short-term relief for bulls, but the broader setup still calls for caution. On the daily chart, XAG/USD remains below the ascending channel it broke on Thursday, with no clear follow-through to the downside. Until the metal reclaims the broken channel or confirms a deeper breakdown, the outlook remains neutral to bearish.

The metal bounced off the 50-day Exponential Moving Average (EMA) at $36.56, which acts as immediate support. A daily close below this zone could expose the next key downside target at the 100-day Simple Moving Average (SMA), located around $34.65.

The Relative Strength Index (RSI) on the daily chart has turned slightly higher and now reads 45, reflecting a modest improvement in momentum. However, it remains below the neutral 50 mark, suggesting that bearish sentiment still prevails. Meanwhile, the Average Directional Index (ADX) is at 21.23, indicating a weak trend and the potential for consolidation in the near term. If the recovery holds, bulls may aim for the $37.50-$38.00 resistance zone. On the downside, a daily close back below $36.00 could revive selling pressure and expose a crucial demand zone in the $35.30-$35.70 range, which could provide some respite for bulls.

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.


Date

Created

 : 2025.08.02

Update

Last updated

 : 2025.08.02

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

USD/JPY Price Forecast: Slides over 2% on weak US data, tumbles below 147.50

The USD/JPY is set to end the week with losses of 0.18% after a worse-than-expected employment report in the United States (US) opened the gates for safe-haven demand, pushing the Japanese Yen higher.
New
update2025.08.02 06:19

EUR/USD skyrockets as US jobs data triggers Fed rate cut bets

The EUR/USD surges more than 1% on Friday as the Greenback gets battered on a worse-than-expected jobs report in the United States (US), which triggered investors' reaction to price in two interest rate cuts by the Federal Reserve (Fed).
New
update2025.08.02 05:59

Canadian Dollar snaps losing streak on volatile NFP Friday

The Canadian Dollar (CAD) came out on top after a messy US Nonfarm Payrolls (NFP) release shattered global positioning in the US Dollar (USD) on Friday.
New
update2025.08.02 04:50

WTI retreats from $70 peak, tests key support as geopolitical tensions escalate

West Texas Intermediate (WTI) Crude Oil is under pressure heading into the weekend, with the price sliding over 3% on Friday to trade near $66.70, pulling back from its highest level near $70 since June 23, reached on Wednesday.
New
update2025.08.02 04:15

Gold soars as dismal US NFP data and Russia tensions spark safe-haven demand

Gold price rallies more than 1.50% on Friday following the release of a dismal Nonfarm Payrolls (NFP) report in the United States (US), which showed the jobs market is cooling faster than expected.
New
update2025.08.02 03:27

AUD/USD slips despite soft NFP as RBA rate cut bets keep Aussie pressured

The Australian Dollar (AUD) remains under pressure against the US Dollar (USD) on Friday, giving back most of its earlier gains despite broad weakness in the Greenback following a disappointing Nonfarm Payrolls (NFP) data.
New
update2025.08.02 03:25

Dow Jones Industrial Average tries to recover from NFP plunge

The Dow Jones Industrial Average (DJIA) plummeted almost 2% top-to-bottom on Friday, falling over 800 points from Thursday's closing bids at its lowest point.
New
update2025.08.02 03:02

USD/JPY drops below 150 after soft US jobs data - Rabobank

For a number of hours leading to the softer than expected US July labour report, USD/JPY was back to trading above the 150.00 level for the first time since early April, Rabobank's FX analyst Jane Foley reports.
New
update2025.08.02 02:18

Silver rebounds after weak US jobs report fuels Fed rate cut speculation

Silver (XAG/USD) reverses early losses on Friday and climbs back above the $36.50 mark, buoyed by a broad-based sell-off in the US Dollar (USD) after the latest Nonfarm Payrolls (NFP) report surprised to the downside.
New
update2025.08.02 01:32

Fed's Bostic admits Fed is in a "difficult environment" as jobs data flashes warning signs

Federal Reserve (Fed) Bank of Atlanta President Raphael Bostic noted on Friday that the latest round of US Nonfarm Payrolls (NFP) jobs data, including revisions, is certainly cause for rate conversation at the Fed, but inflation metrics are still an ingoing concern, especially as the Trump administr
New
update2025.08.02 00:40

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel