silver prices are experiencing slight declines, resting around $28.25 during the early session on Thursday in Asia. Market participants are set to focus on the upcoming US Nonfarm Payrolls (NFP) report, which could influence trading sentiment. While a modest recovery in the US Dollar has contributed to downward pressure on silver , expectations surrounding potential interest rate cuts by the US Federal Reserve may offer some support to the metal’s price.
The recent US JOLTS report indicated a weakening job market, raising the likelihood of a 50 basis points rate cut by the Federal Reserve in the near future. Market analysis suggests a 57% probability for a 25 basis points cut during the Fed’s September meeting, with a 43% chance for a more aggressive 50 basis points reduction. Should the Federal Reserve proceed with these cuts, it could make silver more accessible to a wider range of buyers, potentially limiting its price decline in the short term.
Looking ahead to Friday, the NFP report is expected to reveal an addition of 161,000 jobs in the US economy. Should the report produce disappointing results, the US Dollar may lose ground, which could, in turn, bolster silver prices as it is denominated in USD.
However, concerns about China’s economic growth could pose further challenges for silver . As the world’s largest silver exporter, any slowdown in China’s economy is likely to dampen demand for the precious metal. Adjustments to China’s Gross Domestic Product (GDP) forecasts have been made, reducing expectations from 5.0% to 4.8% for 2024. Additionally, a recent decline in China’s Caixin Services PMI, which fell to 51.6 from 52.1 in July, adds to the negative sentiment surrounding silver demand.
