Silver (XAG) Forecast: Bullish Momentum Builds on Weak Jobs Data, Yield Drops

Silver Rises on Weak Jobs Data and Declining Yields

Silver prices rose Friday after U.S. employment data fell short of expectations, prompting a drop in Treasury yields and heightening speculation of potential Federal Reserve rate cuts. The October nonfarm payroll report showed a modest 12,000 job gain, well below the 100,000 economists had anticipated. The Bureau of Labor Statistics noted that hurricanes and a Boeing strike impacted the figures, but the report has nonetheless raised concerns over the labor market’s strength.

At 12:56 GMT, XAG/USD is trading $32.85, up $0.19 or +0.58%.

Bond Yields Decline as Traders Adjust Fed Rate Expectations

In reaction to the jobs data, U.S. Treasury yields slipped as investors recalibrated their rate expectations. By early afternoon GMT, the 10-year Treasury yield fell 3 basis points to 4.253%, while the 2-year yield dropped 7 basis points to 4.096%. These declines reflect market sentiment that the Federal Reserve could shift toward rate cuts sooner than previously expected. Investors are now pricing in either a 50-basis-point cut in November or two separate 25-basis-point reductions, divided between November and December.

The October employment report was the final key data release ahead of the Fed’s November 7 meeting, adding weight to a potential policy adjustment. Additionally, the Personal Consumption Expenditures (PCE) index, the Fed’s favored inflation metric, rose 2.1% year-over-year in September, in line with expectations and signaling stable inflation. The recent data combination suggests the Fed may look to soften its stance to support economic growth if labor market softness persists.

Technical Analysis: Key Silver Levels to Watch

Technically, silver maintains an upward bias, testing a critical pivot at $32.49, marking the midpoint between the recent $30.12 low and $34.87 high. If silver can sustain above this level, it could target resistance points at $34.35, $34.87, and $35.40. Conversely, if prices dip below the pivot, support is at the 50-day moving average around $31.16, where buyer interest may re-emerge.

Market Forecast

With weaker employment figures and the Fed’s potential for easing policy, silver is positioned for further gains in the near term. A softer rate outlook enhances silver’s appeal as a safe-haven asset, especially as traders weigh potential volatility in the broader economy. Given these factors, the outlook for silver appears cautiously bullish, with market momentum likely driven by Fed signals and upcoming economic indicators.