Analysts expect further support for silver prices as the US Federal Reserve is widely expected to announce a 25 basis point interest rate cut. The CME FedWatch Tool indicates a 99.6% probability of this cut, reflecting growing market confidence in the Fed’s approach to stimulating the economy.
US economic data and its impact on silver prices
The US dollar fell after Friday’s NFP report, posting just 12,000 new jobs in October – well below expectations of 113,000 and down sharply from September’s revised 223,000.
Despite this weak performance, the unemployment rate remained stable at 4.1%, in line with market forecasts. Meanwhile, the US Personal Consumption Expenditures (PCE) price index showed core inflation rose 2.7% year-on-year in September.
In addition, initial unemployment claims fell to a five-month low of 216,000, underscoring the resilience of the US labor market. While weaker jobs data supports silver, improved unemployment claims have dampened expectations for immediate rate cuts.
Relations between China and Australia and uncertainty over the US elections are impacting silver demand
Chinese Trade Minister Wang Wentao’s recent meeting with Australia’s Trade Minister signals a potential economic strengthening, a positive indicator for silver demand, especially for industrial applications in electronics and solar technology.
Furthermore, the upcoming uncertainty in the US presidential election, with tight polls in key states, could drive investors to safe havens like silver.