Silver Price Forecast: XAG/USD attracts some sellers below $28.00 as traders brace for US key data

• Silver price loses ground for the fourth consecutive day around $27.90 in Wednesday’s early European session, down 0.55% on the day. 
• Stronger USD and Chinese demand concerns undermine Silver, while rising Fed rate cut bets might help limit its losses. 
• The US August Nonfarm Payrolls report will take center stage on Friday. 

Silver price (XAG/USD) faces some selling pressure near $27.90 on Wednesday during the early European trading hours. The renewed US Dollar (USD) demand weighs on the USD-denominated Silver price. Traders will take more cues from the highly-anticipated US Nonfarm Payrolls (NFP) on Friday, which might influence the white metal price. 

China’s service activity growth slowed in August despite the summer travel peak. The Chinese Caixin Services Purchasing Managers' Index (PMI) dropped to 51.6 in August from 52.1 in July, weaker than the estimation of 52.2. This report and another PMI report on the weekend added concerns about the economic slowdown and deterioration of demand in China, which exert some selling pressure on the Silver price as China is the top silver exporter globally.

The imminent Federal Reserve (Fed) rate cuts might underpin the precious metal in the near term as it makes Silver cheaper for most buyers. The markets are now pricing in nearly 61% possibility of a 25 basis points (bps) rate cut by the Fed in September, while the chance of a 50 bps reduction stands at 39%, according to the CME FedWatch tool. 

The US August Nonfarm Payrolls (NFP) report on Friday will be more significant than usual and might offer some hints about the size and pace of the Fed rate cut. The US economy is expected to see 163K job additions in August, while the Unemployment Rate is expected to tick lower to 4.2%. In case of the weaker-than-expected reading, this might prompt speculation of the looming US recession and deeper rate cuts, which could boost the Silver price.