Silver (XAG/USD) rebounded on Wednesday, trading around $64.30 at the time of writing, up 0.32% on the day after recovering from earlier losses [1]. The precious metal found support from weaker-than-expected US employment data, specifically the ADP Employment Change report, which showed the US private sector added 38,000 jobs in August—below market expectations of 47,000 and the previous increase of 46,000 [1]. This softer reading signaled cooling labor demand and could complicate the Federal Reserve's case for additional monetary tightening [1].
Despite the weak jobs data, market expectations for a hawkish Federal Reserve remain strong. According to the CME FedWatch tool, there is a roughly 64% chance that the central bank will raise interest rates at its September 15-16 meeting, up from 36% a week earlier [1]. These expectations have pushed US Treasury yields sharply higher, with the benchmark 10-year yield reaching 4.81% on Wednesday, its highest level since 2023, before easing modestly [1]. Elevated yields continue to act as a headwind for Silver, a non-yielding asset [1].
Rising tensions in the Middle East have also driven Oil prices higher, adding uncertainty to the inflation outlook. Persistent energy-driven price pressures could encourage the Fed to maintain a restrictive stance for longer, potentially keeping Treasury yields elevated and limiting demand for precious metals like Silver [1]. The US Dollar remains supported by the prospect of higher interest rates, though disappointing employment figures have prevented stronger momentum for the Greenback [1].
Technically, XAG/USD trades at $64.36, retaining a bearish near-term tone as it remains below the 100-hour simple moving average (SMA) at $66.81 and the 200-hour SMA at $67.80. The Relative Strength Index (RSI) at 48.75 sits just below the neutral line, suggesting easing downside pressure but not yet signaling a decisive shift in momentum [1]. Investors are now focused on Friday's Nonfarm Payrolls (NFP) report, which could provide further clues on the strength of the US labor market and reshape expectations for the Fed's September decision [1].
CONCLUSION
Silver's rebound above $64 was driven by weaker US jobs data, but persistent expectations of tighter Fed policy and elevated Treasury yields continue to limit upside potential. Investors are awaiting the upcoming Nonfarm Payrolls report for further direction on the labor market and monetary policy outlook. The market remains cautious, with technical indicators suggesting the recent bounce may be corrective within a broader downtrend.