Silver Rally Continues: NFP Will Determine Next Move
Silver prices (XAG/USD) strengthened in Tuesday's US trading session, hovering around $40.7 per ounce, maintaining their highest level since 2011. Today's gains follow yesterday's sharp rally and are supported by growing speculation of a Fed rate cut this month, after US PCE data matched expectations. The prospect of looser policy pressured real yields and kept the US dollar relatively tame, a combination that has historically benefited precious metals, including silver.
Fundamentally, hedging interest remains strong amid political uncertainty—from the debate over the Fed's independence to the direction of US tariff policy—and geopolitical tensions. Inflows from silver-based ETFs continue, while industrial demand is boosted by China's solar boom, which has fueled a surge in solar cell exports to India. At the same time, the industrial community expects a supply deficit to enter its fifth year, tightening physical market conditions.
Technically, the $40.80–$41.00 zone provides initial resistance; a clear break opens up room to test $41.50. On the downside, $40.20 and then $39.80 serve as immediate support. Going forward, market participants will be monitoring the ISM and, in particular, the US labor market (NFP) data for further direction. A "cold" reading could potentially extend the rally, while a "hot" surprise could trigger a short-term correction.
Source: Newsmaker.id
