Silver (XAG) Forecast: Strong NFP Could Weigh Prices—Or Will the Market Ignore It?

Silver Holds Firm as Traders Await Key U.S. Jobs Report

Silver prices edged higher on Friday, maintaining strength ahead of the U.S. Non-Farm Payrolls (NFP) report. Investors are weighing silver’s dual role as both a safe-haven asset and an industrial metal, with demand trends shaping the market’s next move.

At 12:40 GMT, XAG/USD is trading $32.26, up $0.04 or +0.12%.

Technically, the short-term trend is up, a trade through this week’s high at $32.55 will signal a resumption of the uptrend. The daily chart indicates there is plenty of room to the upside with $34.87 the next major target. On the downside, a trade through $31.81 will be a first sign of weakness with th pivot at $31.12 the next major target price.

Traders Look to Jobs Data for Fed Policy Clues

The NFP report is expected to show job growth of 169,000, a slowdown from December’s 256,000 but consistent with recent trends. The unemployment rate is projected to hold at 4.1%, while wage growth is forecast to ease to 0.3% monthly and 3.7% annually—the lowest in months.

A weaker-than-expected report could reinforce expectations for Federal Reserve rate cuts, which would likely support silver prices. However, if the labor market remains resilient, the Fed may hold off on easing, keeping pressure on silver. Any signs of economic weakness, such as rising unemployment or downward revisions to previous data, could accelerate bets on monetary stimulus, boosting demand for the metal.

Tariff Concerns Drive Safe-Haven Demand

Trade tensions are adding another layer of uncertainty to the market. The new U.S. administration’s tariff policies, including fresh duties on China while extending temporary exemptions for Mexico and Canada, have heightened global economic concerns. This has increased silver’s appeal as a hedge against economic instability.

Chicago Fed President Austan Goolsbee has acknowledged that while the economy remains strong, trade uncertainties make the Fed’s policy path less predictable. If labor market conditions deteriorate alongside trade tensions, the case for rate cuts would strengthen, benefiting silver.

Industrial Demand Remains a Key Factor

Silver’s industrial applications continue to provide fundamental price support. The metal is widely used in electronics, solar panels, and medical devices, with the renewable energy sector driving sustained demand. Solar panel manufacturing alone accounts for approximately 10% of global silver consumption.

The ongoing expansion of electric vehicles and green energy initiatives further underpins industrial demand. Unlike gold, which is primarily an investment asset, silver’s role in manufacturing gives it additional upside potential, particularly in periods of economic growth.

Market Outlook: Silver Eyes Key Catalysts

Silver’s next move will be influenced by the NFP report and ongoing industrial demand trends. If job growth disappoints or revisions show a weaker labor market, expectations for earlier Fed rate cuts will likely drive silver higher. Conversely, stronger employment data could lift Treasury yields and the U.S. dollar, putting downward pressure on silver.

However, silver’s industrial applications could help limit downside risk, even if monetary policy expectations shift. With both investment and industrial demand providing support, silver remains well-positioned for potential gains if economic conditions favor a more accommodative Fed stance.

More Information in our Economic Calendar.