Bleak Labor Market, Silver Moves Away from 2011 High
Silver prices fell in Tuesday's US trading session below $41 per ounce, slightly off their highest level since 2011. Sentiment in the precious metals market was slightly dampened after the release of revised annual US Nonfarm Payrolls (NFP) data, which showed significant weakness in the labor market. The latest revision noted that the US economy added nearly 1 million fewer jobs between April 2024 and March 2025 compared to the initial report. This data further reinforces the view that the US labor market is much weaker than previously estimated.
Expectations for a Federal Reserve interest rate cut are also growing. The market now rates a high probability that the Fed will cut rates at its September meeting, with the option of a deeper rate cut remaining open. Lower interest rates typically benefit precious metals like gold and silver, as they depress bond yields and weaken the US dollar. This encourages investors to turn to non-yielding assets like silver as an alternative hedge.
On the fundamental side, industrial demand remains a key factor supporting silver prices. The increasing use of clean energy, particularly solar panels and electric vehicles, is driving physical demand for silver amidst still-constrained supply. With this combination of monetary and fundamental factors, analysts assess the medium-term outlook for silver remains positive, although short-term volatility could increase following the release of US inflation data this week.
Source: Newsmaker.id
