Silver Dips as Weak Jobs Data Shifts Rate Outlook

Silver ended a volatile trading week with the front-month COMEX contract settling at $60.71 an ounce, marking a 1.0% daily decline. Despite the modest drop, the week was marked by significant fluctuations driven by shifting expectations around U.S. interest rates.

The week began with silver under pressure as geopolitical tensions pushed Brent crude to briefly touch $107 a barrel, fueling inflation concerns. Treasury yields and the dollar rose in response, while New York Fed President John Williams hinted at further rate hikes before year-end, with traders briefly pricing in a 70% chance of an October rate increase.

However, Friday's weaker-than-expected U.S. jobs report, showing just 29,000 new jobs added in September and an unchanged unemployment rate of 4.2%, dramatically altered the outlook. The probability of an October rate hike plummeted below 15%, providing relief for non-yielding assets like silver.

Meanwhile, the scheduled contract roll on COMEX saw 6,773 contracts delivered, totaling 33.865 million ounces. Physical silver logistics remain strained, with refining delays lasting three to four months. COMEX inventories also saw shifts, with registered stocks falling by 1 million ounces while eligible holdings grew by 3.5 million ounces.

Despite recent declines, analysts maintain a positive long-term outlook. UBS reaffirmed its forecast of $70 an ounce by December 2026, with potential upside to $80 by September 2027. The next key event for silver will be the Federal Reserve's decision on October 28, 2026, followed by the November 6 labor data release.