US jobs and GDP data can determine the price of silver
This week, silver traders are on high alert for upcoming US economic data, especially on the employment and GDP front. These data points could have a major impact on Treasury yields and the US dollar – two key drivers of silver price movements. ADP’s October private payrolls report and preliminary third-quarter GDP data are both scheduled for Wednesday morning, while the broader October jobs report is due Friday. Strong labor or GDP data could support higher rates, putting pressure on silver prices, while weaker-than-expected data could have the opposite effect.
Government bond yields are falling as investors anticipate key economic indicators
U.S. Treasury yields fell on Wednesday, reflecting a cautious tone among investors ahead of economic data. Ten-year government bond yields fell by more than 4 basis points to 4.232%, after a recent peak above 4.3%, the highest level since July. Meanwhile, the 2-year interest rate fell more than 2 basis points to 4.094%. Lower yields generally support silver prices by lowering the opportunity cost of holding non-yielding assets like silver, while higher yields can act as a headwind.
Expectations for rate cuts are increasing as the Fed’s decision looms
The CME Group’s FedWatch Tool shows that traders are increasingly betting on a quarter-point rate cut at next week’s Federal Reserve meeting. The Fed last cut rates by 50 basis points in September, joining a broader trend of easing among global central banks. With the Fed currently in a blackout period ahead of its November 6-7 meeting, it has refrained from making any statements that could impact markets based on this week’s data. If economic indicators point to slowing growth, the likelihood of a rate cut could increase, potentially supporting silver prices.
Short term market forecast
The near-term price of silver will depend on this week’s US economic data, particularly employment and GDP figures, and any indications of a Fed rate cut. A softer dollar and falling Treasury yields would likely boost silver prices, keeping the uptrend intact. However, stronger-than-expected numbers could test silver’s resilience, especially if it pushes yields higher. For now, silver’s ability to break above $34.35 will be key to maintaining upside momentum, while a decline below $33.08 could mean bearish pressure in the near term.