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Silver (XAG) Forecast: Bullish Fed Bets Offset by Growth Worries in Silver Market
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Silver prices edge higher on soft U.S. jobs data, but growth concerns weigh on industrial demand. Traders eye Fed rate cuts and key technical levels.
Silver Edges Higher But Lags Gold Rally as Growth Concerns Weigh
Silver prices closed higher on Friday, but gains lagged behind gold’s breakout as weak U.S. labor data drove mixed sentiment across rate-sensitive and industrial-linked assets. While softer job numbers triggered a drop in Treasury yields and a weaker dollar—typically bullish for precious metals—concerns about slower economic growth dampened enthusiasm for silver.
The U.S. economy added only 22,000 jobs in August, far short of the 75,000 estimate. The unemployment rate ticked up to 4.3%, and ADP private payrolls also disappointed earlier in the week. The miss fueled speculation of a Federal Reserve rate cut at the September 17 meeting, with futures markets now pricing a 90% probability of a 25-basis-point reduction and a 10% chance of a more aggressive 50-basis-point move.
On Friday, XAG/USD settled at $40.99, up $0.32 or +0.78%.
Dollar and Yields Drop Sharply Following Jobs Miss
The U.S. dollar index fell 0.48% to 97.767, pressured by broad-based losses. It dropped 0.70% against the yen and 0.91% versus the Swiss franc. The euro rose 0.55% to $1.171675, while the British pound gained 0.51% to $1.35055.
Treasury yields followed suit, with the 10-year yield falling to 4.088%—its lowest since April. The 2-year yield slid to 3.511%, marking a five-month low. Falling real yields tend to support non-yielding assets like silver, but industrial concerns capped upside.
Stagflation Talk Builds, Curbing Industrial Silver Demand
Stagflation fears are gaining momentum, adding complexity to the silver outlook. Juan Perez of Monex USA noted that tariffs and policy uncertainty are weighing on hiring and cost structures, eroding industrial demand. Slower hiring may translate to weaker consumption, reducing demand for silver in sectors like electronics, solar, and auto manufacturing.
Wall Street echoed these worries, with major indexes reversing early gains. The S&P 500, Nasdaq, and Dow all moved into negative territory by the close.
Silver Technicals: Key Levels to Watch
Technically, silver remains in an uptrend. Minor resistance is located at $41.47, with the next major target at the long-term high of $44.22. On the downside, nearby support is seen at the minor pivot of $39.78, with stronger support at the 50-day moving average of $38.20.
Market Forecast: Cautiously Bullish, but Growth Fears Loom
Silver’s bullish structure remains intact, supported by falling yields and a weakening dollar. However, its industrial role complicates the picture, with economic slowdown concerns tempering investor appetite. A sustained break above $41.47 could open the door to further gains, but traders should watch growth-linked headlines closely. The bias remains cautiously bullish in the short term—provided support at $38.20 holds.
More Information in our Economic Calendar.
About the Author
James Hyerczykauthor
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.
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