Silver Stuck Below $66.25 as Market Awaits August's US Nonfarm Payrolls and Fed Decision
Silver prices are struggling to extend their recent recovery above $66.25 as market participants await the release of August's US Nonfarm Payrolls (NFP) data on Friday.
TD Securities forecasts a rebound in NFP to 95k after July's decline of 23k, with balanced risks pointing to limited changes in headline labor market indicators.
A modestly hawkish employment report will reaffirm the Fed's attention on inflation, but it is unlikely to push the Committee towards hikes, according to TD analysts. Market pricing shows a two-in-three probability that the Fed will raise interest rates at its September meeting, limiting the appeal of non-yielding assets such as Silver.
The rally in oil prices, fueled by disruptions through the Strait of Hormuz, is another headwind for Silver. Elevated oil prices tend to fuel global inflation expectations, heightening worries that central banks may need to tighten policy further or keep rates higher for longer, undermining demand for non-yielding assets like Silver.