Silver (XAG) Forecast: Rally Stalls Below 50-Day Average After Strong U.S. Payrolls

Silver Drops as Strong Jobs Data and Fed Patience Undermine Bullish Momentum

Silver ended the week under pressure, retreating below key technical levels as traders digested a stronger-than-expected U.S. jobs report and recalibrated expectations around Federal Reserve rate cuts. Easing trade tensions between the U.S. and China helped stabilize sentiment, but not enough to reverse the bearish tone in metals.

On Friday, XAG/USD settled at $32.01, down $0.40 or -1.24%.

Fed Rate-Cut Hopes Pushed Back After Jobs Surprise

April’s nonfarm payrolls report was the key driver of Friday’s price action. The U.S. economy added 177,000 jobs—well above forecasts—while the unemployment rate held at 4.2% and hourly earnings rose 3.8% year-on-year. Though backward-looking, the report signaled a still-resilient labor market despite recent tariff uncertainty, giving the Fed little reason to cut rates soon.

Following the release, traders trimmed bets on a June rate cut, with the market now pricing in the first potential move in July. This repricing lifted the U.S. 10-year Treasury yield over 7 basis points to 4.308% and the 2-year by more than 12 basis points to 3.828%, directly pressuring silver, which offers no yield and tends to underperform when rates are rising or stable.

Tariff Concerns Offset by China’s Willingness to Talk

Trade developments between the U.S. and China provided some relief but lacked the immediacy to support silver prices. China’s commerce ministry confirmed that the U.S. had reached out to restart tariff talks, and Beijing stated its door remains open. However, China also made it clear that meaningful progress requires Washington to cancel existing unilateral tariffs—currently at 145%, with 125% retaliatory tariffs from China in place. Traders welcomed the diplomatic tone but saw little change in the near-term inflation or growth risks posed by tariffs.

Technical Breakdown Targets Key Support Zone

Technically, silver remains under bearish control, trading below its 50-day moving average at $32.63. The short-term range of $34.59 to $28.31 places the market in a key retracement zone between $32.19 and $31.45. A more immediate minor retracement from $28.31 to $33.70 sets a downside target between $31.00 and $30.37. The 200-day moving average at $31.09 reinforces this zone, marking it as a critical support area.

Market Forecast

Unless silver reclaims $32.63, the path of least resistance is lower. A firm labor market and delayed rate-cut expectations reduce the appeal of metals in the short term.rade talks may limit downside risk but won’t turn the market without tangible tariff rollbacks. The next key test is $31.09 to $31.00; failure to hold could bring $30.37 into view. Until macro conditions shift more decisively, rallies may be sold.

More Information in our Economic Calendar.