Silver (XAG) Forecast: Silver Rally Stalls on Profit-Taking Ahead of Key NFP Report

Profit-Taking Hits Silver After Rally, But Buyers May Be Waiting Below

Silver prices edged lower on Thursday, retreating from a 14-year high of $41.47, as profit-taking set in following a sharp rally. The move echoes a broader pause in the precious metals complex, with gold also pulling back after reaching an all-time high. Market participants are rebalancing positions ahead of Friday’s critical U.S. non-farm payrolls (NFP) report, which could determine the Federal Reserve’s next policy move.

Technically, silver has key support at the 50% retracement level of $39.78, a potential entry point for value-oriented buyers. Deeper support sits at the 50-day moving average of $38.10, with additional downside protection around $38.09 and $36.96. These levels will be watched closely as the metal consolidates gains.

Federal Reserve in Focus as Labor Data Disappoints

Weaker-than-expected U.S. labor market data is fueling speculation that the Fed is nearing a rate cut. ADP reported private payrolls rose just 54,000 in August—well short of the 75,000 estimate and down sharply from July’s 106,000. Weekly jobless claims also climbed to 237,000, surpassing forecasts, while job openings sank to a 10-month low at 7.181 million.

This string of disappointing data has pushed Fed funds futures to price in a 97.4% chance of a 25 basis-point rate cut at the upcoming September FOMC meeting. Traders are now pricing in 139 basis points of total easing by the end of next year, a significant dovish tilt that could support precious metals in the near term.

Falling Yields and Dollar Trends Offer Support for Precious Metals

Treasury yields are under pressure as expectations for a Fed pivot rise. The 10-year yield dropped to 4.18%, the 2-year to 3.60%, and the 30-year to 4.86%. Meanwhile, the dollar remains relatively firm, with the DXY ticking up to 98.23. A stable-to-lower dollar alongside falling yields has historically been a strong tailwind for silver and gold, making this a potentially constructive backdrop for renewed upside.

Will Silver Break Above $41.47 and Run Toward $44.22?

With the labor market showing signs of cooling and a rate cut nearly priced in, the technical setup for silver remains constructive—provided key support levels hold. A break above $41.47 could spark the next leg higher, with bulls targeting the multi-year resistance zone at $44.22.

However, until Friday’s NFP confirms the Fed’s easing path, silver may continue consolidating between $39.78 and $41.47. Traders should watch both price action and macro signals closely, as any dovish surprise could be the catalyst that pushes silver firmly back into breakout mode.

More Information in our Economic Calendar.