Silver Price Forecast: XAG/USD steadies near $28 with US Inflation in focus

LONDON (September 9) Silver price (XAG/USD) inches higher to near $28.00 per troy ounce during the Asian session on Monday. The non-yielding assets like Silver gains ground as weak US jobs data increase the likelihood of a 25 basis-point rate cut by the Federal Reserve (Fed) at its September meeting.

The US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) added 142,000 jobs in August, below the forecast of 160,000 but an improvement from July’s downwardly revised figure of 89,000. Meanwhile, the Unemployment Rate fell to 4.2%, as expected, down from 4.3% in the previous month.

Lower interest rates tend to benefit Silver by reducing the opportunity cost of holding non-yield-bearing bullion assets.  According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting.

Additionally, Chicago Fed President Austan Goolsbee remarked on Friday that Fed officials are starting to align with the broader market's sentiment that a policy rate adjustment by the US central bank is imminent, according to CNBC.

FXStreet’s FedTracker, which uses a custom AI model to evaluate Fed officials' speeches on a dovish-to-hawkish scale from 0 to 10, rated Goolsbee's comments as dovish, assigning them a score of 3.2.

The potential gains for Silver might be limited due to safe-haven flows, given the recent easing of geopolitical tensions in the Middle East. Israeli forces have withdrawn from Jenin, according to Reuters citing the Palestine news agency WAFA.

FXStreet