Benefitting from a weak nonfarm payrolls report last week, recent demand for precious metals has secured a fresh yearly high for silver, trading at around $41.2708 at the time of writing.
Silver trades +0.68% higher in today’s session.
Silver (XAG/USD): Key takeaways from today’s session
- With last week’s price action representing silver’s best weekly performance since early June, US labour data significantly missing expectations has further increased rate cut bets, benefitting non-yielding precious metals
- Otherwise, persistent inflation, spiralling US debt, and generalised lack of economic confidence are offering a significant tailwind to silver pricing
Silver (XAG/USD): September Fed rate cut virtually ‘nailed-on’ after poor labour data
Ending last week in spectacular fashion, August’s NFP report fell short of expectations significantly, offering some upside to silver, which ended
Coming in some 50,000 openings below consensus, at 22k, the result not only represents a worse-than-expected result, but also signifies the fourth consecutive month where job growth has been virtually flat.
While this is, quite literally, yesterday’s news, the report has all but confirmed that the Federal Reserve will cut target rates in its upcoming decision, aiming to kickstart an otherwise struggling labour market.
Notwithstanding, recent dovish commentary from the Federal Reserve has also fed into the same narrative.
CME FedWatch, 08/09/2025
At the time of writing, CME FedWatch rates a 25 bps cut at an 88.4% probability, which indicates a rare level of confidence in the Fed’s next decision.
As expected, a non-yielding asset such as silver stands to benefit from any suggestion that rate cuts are becoming more likely, as proven by price action on Friday. At least for now, upside seems to have continued somewhat into this week’s trading.
Silver (XAG/USD): Safe-haven flows and inflationary pressures still at play
While the dollar looks set to continue its downtrend, it would be fair to say markets remain wary of the US economy, in no small part thanks to questions surrounding current sovereign debt, trade agreements and inflation.
For now, these questions largely remain unanswered. This uncertainty dampens risk appetite, significantly boosting precious metal gains, a phenomenon seen for much of this year.
In the latter case, sticky inflation, at least in a vacuum, is favourable for silver pricing, with many looking to precious metals as a means of hedging inflation. While heightened inflation can sometimes be met with a rate hike, typically silver negative, a struggling labour market will almost certainly force the Fed’s hand in cutting rates this time around.
Coupled with renewed safe-haven flows on general recession fears, at least in the short term, one outcome is a two-sided tailwind helping bolster further precious metal gains – silver included.
Silver (XAG/USD): Technical analysis – 08/09/2025
Silver (XAG/USD), OANDA, TradingView, 08/09/2025
On the daily timeframe, current price action remains well supported. If price can stay above $40.60, bulls will likely target $42.72 in the near term
