Silver Corrects Ahead of US Nonfarm Payrolls Data
Silver prices moved slightly lower on Friday, after strengthening quite aggressively earlier in the week. Market participants tended to hold large positions as the main focus now turns to the release of US employment data (Nonfarm Payrolls/NFP).
The main pressure came from the still-strong US dollar. When the dollar strengthens, silver typically experiences pressure as it becomes more expensive for buyers outside the US, leading to a decline in buying interest in the short term.
However, silver's decline is potentially limited as the market still believes the Fed is likely to remain dovish this year. Expectations of interest rate cuts typically support precious metals, including silver, as the opportunity cost of holding non-yielding assets is lower.
Silver's movement is also influenced by the "two-faced" dynamic: besides being considered a safe haven asset like gold, silver has a large industrial demand component. Therefore, any changes in economic expectations—especially from US data—can quickly change the direction of price movements.
Ahead of the NFP, traders will analyze the data to determine whether the US economy is robust or starting to slow. If the data is weaker than expected, the market could become more confident in the possibility of an interest rate cut—which could potentially encourage silver to recover. Conversely, data that is too strong could prolong the dollar's strength and put further pressure on silver.
Beyond economic factors, geopolitical risks also contribute to the downside. Global tensions and policy uncertainty often trigger demand for safe-haven assets, so any correction in silver has the potential to trigger buying when prices fall.
5 key points:
Silver weakened slightly as the market awaited the release of the US Non-farm Payrolls (NFP) data.
A strong US dollar was the main pressure on silver prices.
Expectations of a dovish Fed/potential rate cut helped limit silver's decline.
Silver is sensitive because it is influenced by two factors: safe haven and industrial demand.
Heated geopolitics could trigger buying when silver prices correct. (asd)
Source: Newsmaker.id
