Like gold, silver’s strength comes from expectations of Fed easing, a softer dollar and safe-haven buying, although both metals see cautious trading ahead of the US Nonfarm Payrolls (NFP) report.
The US Dollar Index weakened further after labor market data revealed higher-than-expected initial unemployment claims, which rose by 9,000 to 224,000 in the week ending November 29. However, continuing unemployment claims fell by 23,000 to 1.871 million, offering a mixed economic outlook. .
Fed Chairman Jerome Powell noted that the U.S. economy is performing better than earlier expectations, indicating possible caution on further rate cuts.
Yet market sentiment remains clouded by the uncertainties surrounding President-elect Donald Trump’s proposed trade tariffs. These concerns have dampened risk appetite, resulting in more attention being paid to gold and silver as safe haven investments.
Major focus on non-farm payrolls and Fed decisions
Investors estimate a 70% probability that the Federal Reserve will cut rates by 25 basis points at its December meeting. The remaining 30% indicates a possible break. This speculation, combined with the low interest rates on 10-year US government bonds, continues to weigh on the dollar and indirectly supports the gold price.
All eyes are now on Friday’s NFP report, which will provide crucial insights into the labor market and influence the Fed’s upcoming decision. A weaker-than-expected NFP figure could reinforce expectations for rate cuts, potentially pushing gold prices higher.