Silver prices consolidated on Friday, hovering just under a 14-year high as weak U.S. labor data reinforced expectations of imminent Federal Reserve rate cuts. Spot silver traded around $41.00, after reaching $41.47 on Wednesday, its strongest level since September 2011.
The disappointing Nonfarm Payrolls report showed the economy added only 22,000 jobs in August, well below forecasts of 75,000. The unemployment rate rose to 4.3%, the highest since late 2021, while wage growth held steady at 0.3% month-over-month and 3.7% year-over-year.
These figures underscored mounting evidence of a cooling labor market, aligning with recent signals:
- ADP payrolls showed slower hiring momentum.
- Job openings tracked by JOLTS declined further.
- Initial jobless claims trended higher.
- ISM employment indices remained in contraction.
The data pushed the U.S. Dollar Index to its weakest level since late July, while Treasury yields also fell, creating tailwinds for silver.
Market Bets on Aggressive Fed Cuts
Ahead of the report, traders were fully pricing in a 25 basis point cut at the Fed’s September 16–17 meeting. Afterward, markets assigned an 88% chance of that outcome, while odds of a larger 50 basis point move climbed to 12%, up from virtually zero before the release.
The shift builds on Fed Chair Jerome Powell’s remarks at Jackson Hole in late August, where he acknowledged rising labor market risks. Powell suggested policymakers may prioritize employment stability, even at the expense of inflation goals, signaling greater policy flexibility.
This recalibration has fueled demand for precious metals as investors hedge against dollar weakness and softer yields.
Technical Levels Keep Bullish Bias
From a technical standpoint, silver maintains a constructive structure, consolidating above key support zones.
- Immediate support is at $40.50.
- The 50-period Simple Moving Average on the 4-hour chart provides firmer support near $39.96.
- A broader floor is seen around $39.00, the recent breakout zone.
On the upside, resistance sits at $41.50, with the next target at the psychological $42.00 level. The Relative Strength Index (RSI) near 60 indicates room for additional gains without tipping into overbought territory, while MACD signals suggest momentum is slowing but still positive.
Overall, as long as silver holds above $40.50, dips are expected to attract buyers, with the market eyeing a decisive move beyond $41.50 that could pave the way toward $42.00.