Silver prices moved higher during Friday’s Asian session, August 7, with XAG/USD rising around 1% to trade near $62.20 as investors positioned themselves ahead of the highly anticipated US Nonfarm Payrolls (NFP) report for July. The employment data, scheduled for release at 12:30 GMT, is expected to be one of the week’s biggest market-moving events.
Investors are watching the July labor market report closely because it could shape expectations for the Federal Reserve’s next interest rate decision. TD Securities expects the US economy to add around 70,000 jobs in July, improving slightly from June’s weaker-than-expected gain of 57,000.
The unemployment rate is forecast to remain steady at 4.2%, indicating that the labor market remains stable despite slower hiring. With the Federal Reserve offering limited guidance on future policy, the employment report could play a key role in determining the direction of interest rates.
Oil Prices May Cap Silver Gains
Silver’s upside could be limited by the recent rebound in crude oil prices.
WTI crude is holding near $77 per barrel as hopes for an immediate reopening of the Strait of Hormuz continue to fade. Higher oil prices tend to increase inflation expectations, which may encourage central banks to keep interest rates higher for longer. That scenario is generally unfavorable for non-yielding assets such as silver.
Silver remains in a bullish short-term trend after staying above the 20-period Exponential Moving Average (EMA) at $59.66. The Relative Strength Index (RSI-14) is around 56, suggesting positive momentum without entering overbought territory.
Key support is located at the 20-day EMA of $59.66. If that level fails, silver could decline toward the year-to-date low of $54.77. On the upside, the first resistance stands at $63.28, with a breakout opening the way toward $67.17.
Friday’s US Nonfarm Payrolls report could become the primary catalyst for silver’s next major move. A stronger-than-expected jobs report would likely reinforce expectations that the Federal Reserve will keep interest rates elevated for longer, potentially strengthening the US Dollar and limiting silver’s gains.
Conversely, weaker employment data could revive hopes for future rate cuts, weakening the dollar and providing fresh momentum for precious metals. Traders should also keep a close eye on oil prices, as continued strength in crude could increase inflation expectations and add another layer of volatility to the silver market.
