Silver (XAG/USD) traded 1% higher to near $62.20 during the Asian session on Friday, as investors awaited the United States Nonfarm Payrolls (NFP) data for July, scheduled for release at 12:30 GMT [1]. TD Securities forecasts a modest rebound in July payrolls, projecting an increase to 70,000 after June's downside surprise of 57,000, while expecting the unemployment rate to remain steady at 4.2% following a decline in June. This outlook suggests a labor market that is stable but not decisively weakening [1].
The upcoming employment data is anticipated to significantly influence Federal Reserve interest rate expectations, especially given the absence of forward guidance from the central bank [1]. On the global front, a sharp recovery in oil prices—driven by diminished hopes for an immediate reopening of the Strait of Hormuz, a key passage for nearly 20% of global energy supply—could limit further upside for silver. At press time, WTI oil was trading near $77.00, and higher oil prices are boosting global inflation projections, which raises fears of interest rate hikes by central banks. Such hikes are generally unfavorable for non-yielding assets like silver [1].
From a technical perspective, XAG/USD is trading above the 20-period exponential moving average (EMA) at $59.66, maintaining a constructive near-term bias. The Relative Strength Index (14) stands at 56.27, indicating bullish momentum without being overbought. Immediate support is at the 20-day EMA ($59.66), and a failure to hold this level could see silver return to its year-to-date low of $54.77. On the upside, the July 6 high at $63.28 is the next barrier, with a decisive break potentially opening the door to the June 22 high at $67.17 [1].
CONCLUSION
Silver's price is buoyed by anticipation of the US July jobs report and broader market expectations for Federal Reserve policy. While technical indicators remain bullish, rising oil prices and inflation concerns could cap further gains. Investors are closely watching the NFP data for signals on future interest rate moves, which will be pivotal for silver's trajectory.