The US Dollar Index (DXY) reached a high of 108.071 earlier this month before retreating to close at 105.782, down 1.59% for the week. While this pullback eased pressure on silver late in the week, the dollar’s overall strength weighed heavily on the metal in November. A strong dollar tends to make silver less attractive to international buyers, and Core PCE data underscored the lingering inflation concerns that kept the dollar relatively high.
Will geopolitical and economic events change the momentum?
Geopolitical developments, such as proposed tariffs on China, Mexico and Canada by newly elected President Trump, add a layer of volatility to the outlook. Trade tensions have historically favored silver, which benefits as a safe haven during economic uncertainty. On the economic front, the upcoming US jobs report is crucial. With nonfarm payrolls expected to rebound to 220,000, a weaker-than-expected figure could boost expectations for rate cuts, which could soften the dollar and potentially support silver. Conversely, stronger jobs data could put bearish pressure on the metal.
What’s next for silver prices?
The short-term outlook for silver remains cautious as the strong dollar and uncertain Federal Reserve policies continue to weigh on prices. A weaker dollar or a further decline in Treasury yields could allow a recovery towards $32.26, perhaps leading to an upside breakout. However, a break below $29.64 could open the door to deeper losses, targeting $29.00. This week’s US jobs data will likely set the tone for December, with traders preparing for greater market volatility.
More information in our Economic Calendar.