Silver Price Forecast: XAG/USD rises to near $29.00 ahead of US NFP

LONDON (August 2) Silver price (XAG/USD) appreciates to near $29.00 per troy ounce during the early European hours on Friday. Traders assess the upcoming July US Nonfarm Payrolls and Average Hourly Earnings data, set to be released later in the North American session, for insights into the US labor market.

The latest manufacturing and labor market data have created a complex scenario involving an economic slowdown in the United States and rising expectations for a Federal Reserve rate cut. If the economic downturn worsens significantly, it could dampen market sentiment, making any Fed rate cuts less impactful. In this context, demand for safer assets like Silver could increase

US ISM Manufacturing Purchasing Managers Index (PMI) tumbled to an eight-month low of 46.8 in July, compared to the previous 48.5 reading and the forecasted move up to 48.8. US Initial Jobless Claims for the week ended July 26 rose to 249K from the previous week’s 235K, exceeding the forecast uptick to 236K.

In China, Caixin Manufacturing PMI for July came in at 49.8, below the expected 51.5 and down from the previous 51.8. Weak China’s Purchasing Managers Index (PMI) data raise concerns about economic activity in the world’s manufacturing hub. This situation could negatively impact Silver demand, as the precious metal is crucial in various industrial applications, including electronics, solar panels, and automotive components.

Additionally, the safe-haven demand for grey metal increased due to escalated geopolitical tensions in the Middle East. Tensions in the Middle East remain high following the assassination of Hamas leader Ismail Haniyeh in Iran.

According to the New York Times on Wednesday, Haniyeh was killed in Iran's capital after attending the new president's inauguration. Both Iranian officials and Hamas have accused Israel of being behind the strike.

FXStreet