Silver Price Forecast: XAG/USD rises to near $62.20 in countdown to US NFP data
- Silver price trades higher to near $62.20 ahead of the US NFP data for July.
- The US NFP data will influence the Fed’s interest rate prospects.
- A sharp recovery in oil prices could limit the Silver price’s upside.
Silver price (XAG/USD) trades 1% higher to near $62.20 during the Asian trading session on Friday. The white metal rises ahead of the United States (US) Nonfarm Payrolls (NFP) data for July, which will be published at 12:30 GMT.
TD Securities looks for a modest July payrolls rebound with unemployment steady
According to TD Securities, July’s jobs report is expected to show only a slight improvement after June’s downside surprise. The bank’s economists anticipate that "July NFP picked up modestly to 70k after surprising to the downside with 57k in June," pointing to a still subdued pace of hiring. They also expect the jobless rate to hold its recent gains, noting that "the UE rate likely went sideways at 4.2% after declining in June," consistent with a labor market that remains broadly stable rather than decisively weakening.
The official employment data is expected to have a significant influence on the Federal Reserve’s (Fed) interest rate expectations in the absence of “forward-guidance” from the central bank.
On the global front, a sharp recovery in oil prices due to diminished hopes of an immediate reopening of the Strait of Hormuz, a vital passage to almost 20% of global energy supply, could limit the upside in the Silver price.
At press time, the WTI Oil price holds on Thursday’s recovery move to near $77.00.
Higher oil prices boost global inflation projections, a scenario that prompts fears of interest rate hikes by central banks, which is unfavorable for non-yielding assets, such as Silver.
Silver technical analysis
XAG/USD trades at around $62.20 above the 20-period exponential moving average (EMA) at $59.66, keeping the near-term bias constructive as price holds over this key trend reference.
The Relative Strength Index (14) at 56.27 sits in positive territory without being overbought, hinting that bullish momentum remains in place but not yet overstretched.
On the downside, immediate support is seen at the 20-day EMA at $59.66, which reinforces the broader bullish structure as long as it holds. The white metal could return to the Year-To-Date (YTD) low at 54.77 if it fails to hold the 20-day EMA. On the upside, the July 6 high at $63.28 is the immediate barrier; a decisive break above the same would open the door towards the June 22 high at $67.17.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs
Why do people invest in Silver?
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Which factors influence Silver prices?
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
How does industrial demand affect Silver prices?
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
How do Silver prices react to Gold’s moves?
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.