Traders are now looking ahead to the Nonfarm Payrolls report and other key economic releases later this week, which could provide further insight into the Federal Reserve’s policy trajectory.
Silver is slipping as the dollar rally dampens its appeal
Silver (XAG/USD) is trading around $29.52, a reversal from an intraday low of $29.41. Like gold, silver is under pressure from a robust dollar and rising US government bond yields. As a result, silver’s appeal to non-US buyers is diminishing, limiting its upside potential.
The broader economic landscape, including expectations of slower Fed rate cuts, is adding to the pressure. While silver has shown resilience in the $29.40-$29.60 range, further declines could be driven by stronger-than-expected US economic data.
Geopolitical tensions provide limited support
Geopolitical risks, including tensions in the Middle East and continued uncertainty in Ukraine, have provided limited support for precious metals. However, these factors have been largely offset by the stronger dollar and rising bond yields.
Overall, the gold and silver markets are struggling in a challenging macroeconomic environment. With Federal Reserve policy dominating sentiment, precious metals remain vulnerable to further declines unless the dollar weakens or geopolitical risks increase.
Traders will keep a close eye on US data this week to gauge the short-term trajectory for both metals.