However, headwinds from a stronger US dollar and rising government bond yields pose challenges. The dollar index is hovering around a one-week high, reducing silver’s appeal to non-dollar investors. Meanwhile, 10-year Treasury yields rose to 4.73%, the highest level since April, potentially capping silver’s upward trend.
Fed policy and nonfarm payrolls in focus
The minutes of the Federal Reserve’s December meeting show heightened concerns about persistent inflation, clouding the outlook for rate cuts in 2025. Market participants expect only two quarter-point rate cuts this year, although continued quantitative tightening and trade uncertainties could complicate the Fed’s strategy.
Attention now turns to Friday’s U.S. nonfarm payrolls report, which calls for an increase of 160,000 jobs in December. A weaker-than-expected report could allay fears of further rate hikes, providing additional support to silver prices.
Short-term outlook: bullish but cautious
Silver’s technical momentum and safe-haven demand support the near-term bullish outlook. A sustained move above $30.54 and the 50-day moving average of $30.71 could spark a rally towards $32.33. However, a stronger dollar and higher government bond yields could limit gains. Traders should keep a close eye on Friday’s jobs data and evolving inflation risks for further signals.
More information in our Economic Calendar.