Silver Price Forecast: XAG/USD remains above $30.00 ahead of US Nonfarm Payrolls
10.01.2025, 02:56

Silver Price Forecast: XAG/USD remains above $30.00 ahead of US Nonfarm Payrolls

  • Silver price remains stronger as receives support from safe-haven demand.
  • The precious metals like Silver gain support amid uncertainty surrounding inflation and potential Trump tariffs.
  • Traders closely monitor the US Nonfarm Payrolls report for further insights into the Federal Reserve's policy direction.

Silver price (XAG/USD) continues its rally after registering little losses in the previous session, trading around $30.20 per troy ounce during the Asian hours on Friday. Traders are now focused on US labor market data including Nonfarm Payrolls (NFP), for additional insights into the Federal Reserve's policy direction.

The precious Silver, often considered a safe-haven asset, gains support amid uncertainty surrounding inflation and potential tariffs under President-elect Trump’s administration, as highlighted by the US Federal Reserve (Fed).

However, the upside of the non-yielding metal could be restrained as long-term US bond yields continue climbing on heavy supply. The 10-year stands at 4.68%, while the 30-year stands at 4.92% at the time of writing. This could be attributed to hawkish Federal Open Market Committee (FOMC) Minutes from the December meeting.

The latest FOMC Meeting Minutes showed that Fed policymakers expressed concern about inflation and the impact that President-elect Donald Trump’s policies could have. Fed officials indicated they would be moving more slowly on rate reductions because of the uncertainty. Fed officials penciled the expected cuts in 2025 to two from four in the previous estimate at September’s meeting.

Heightened geopolitical tensions have intensified market volatility, driving investors toward safe-haven assets like Silver. On Thursday, four people were killed in shelling incidents in Ukraine, with regional officials attributing one attack to Russia's military and another to Ukrainian forces. In the Russian-controlled Zaporizhzhia region, two additional fatalities occurred when the town of Kamyanka-Dniprovska came under Ukrainian fire, according to Russia-appointed governor Yevgeny Balitsky, as reported by Reuters.

Silver FAQs

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.

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.

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.

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.

 

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