Additionally, the U.S. dollar surged to its strongest level in seven weeks, compounding the negative pressure on silver. A stronger dollar makes silver more expensive for foreign buyers, limiting global demand and keeping silver under pressure.
The labor market’s resilience, with nonfarm payrolls rising by 254,000 in September, also led to reduced expectations for aggressive rate cuts by the Federal Reserve. While the market is still pricing in a possible 25-basis-point cut in November, the strong data has dampened hopes of more substantial monetary easing.
Geopolitical Factors Provide Limited Support
Geopolitical tensions, especially the ongoing conflict in the Middle East, have not provided the same level of support to silver as they have for gold. The conflict has contributed to some safe-haven buying, but silver’s performance remains more closely tied to industrial demand, which has been notably weak.
China, the world’s largest consumer of industrial silver, has shown little increase in demand. Local silver prices in China remain discounted, and the Chinese central bank has refrained from increasing reserves, further limiting silver’s upside potential.
Next Week’s Forecast: Focus on U.S. Economic Data and Fed Policy
Looking ahead to the coming week, silver’s performance will depend largely on further developments in U.S. economic data and the Federal Reserve’s next steps. With the market pricing in a potential 25-basis-point rate cut, traders will be closely watching for any signs that could confirm or alter the Fed’s path. If economic data supports further monetary easing, silver could find renewed buying interest.