Moreover, the US dollar rose to its strongest level in seven weeks, adding to the negative pressure on silver. A stronger dollar makes silver more expensive for foreign buyers, limiting global demand and keeping silver under pressure.
The resilience of the labor market, with nonfarm wages rising by 254,000 in September, also reduced expectations for aggressive interest rate cuts from the Federal Reserve. While the market is still pricing in a possible 25 basis point cut in November, the strong data has dampened hopes for more substantial monetary easing.
Geopolitical factors provide limited support
Geopolitical tensions, especially the ongoing conflict in the Middle East, have not provided silver with the same level of support as gold. The conflict has contributed to some safe-haven buying, but silver’s performance remains more closely tied to industrial demand, which has been noticeably weak.
China, the world’s largest consumer of industrial silver, has shown little increase in demand. Local silver prices in China remain discounted, and the Chinese central bank has refrained from adding to reserves, further limiting silver’s upside potential.
Next week’s forecast: Focus on US economic data and Fed policy
Looking ahead to the week ahead, silver’s performance will largely depend on further developments in US economic data and the Federal Reserve’s next steps. With the market pricing in a possible 25 basis point rate cut, traders will be paying close attention to signs that could confirm or change the Fed’s path. If economic data supports further monetary easing, silver could see renewed buying interest.