Silver (XAG) Forecast: Could Easing Labor Data Lift Prices?
LONDON (January 6) Silver prices rose slightly last week, with XAG/USD closing at $29.615, up $0.228 or +0.78%. Despite the gain, silver continues to face headwinds as traders lock in profits and broader macroeconomic factors weigh on sentiment. Treasury yields, Federal Reserve policy, and dollar strength remain the dominant forces limiting silver’s upside, even as industrial demand holds steady.
Weekly Silver (XAG/USD)
Technically, the main trend is up, but the minor trend is down. This is weighing on upside momentum.
Geopolitical Uncertainty Provides Modest Safe-Haven Support
Geopolitical risks continue to offer limited support for silver. While gold remains the primary safe-haven asset during times of uncertainty, silver benefits indirectly. Ongoing conflicts in Ukraine and the Middle East, alongside central bank gold purchases, have helped stabilize precious metals markets, preventing deeper pullbacks in silver.
China’s Stimulus: A Potential Game-Changer
China’s proactive economic policies could provide a boost to silver prices heading into 2025. President Xi Jinping’s recent pledge to implement broad stimulus measures highlights China’s focus on accelerating industrial growth and supporting domestic markets. These initiatives, aimed at boosting infrastructure and renewable energy, are likely to drive higher demand for silver across key industrial sectors.
Non-Farm Payroll Data and Its Implications
Next week’s Non-Farm Payrolls report for December 2024 will be closely watched by traders. As the first labor market report of the new year, it could have significant implications for Federal Reserve policy. Strong labor data may reinforce the Fed’s cautious rate-cut trajectory, strengthening the dollar and pressuring silver. Conversely, weaker job growth could increase speculation around further easing, potentially providing a lift to silver prices.
Forecast: Key Trends to Watch
Silver’s outlook will largely depend on developments in Fed policy, labor market data, and China’s economic measures. The focus remains on industrial demand and the supply deficit, but short-term price action will reflect broader macroeconomic shifts. Traders should watch the Non-Farm Payrolls release and any further stimulus announcements from China as key drivers for silver’s direction in the coming weeks.
FXEmpire
