Silver’s recent performance has been influenced primarily by macroeconomic factors and market sentiment, rather than developments in the industrial or physical demand sectors.
“Silver is caught in the cross-current of a stronger dollar and shifting expectations around Fed policy,” said Jane Hartman, a senior metals analyst at Sigma Capital. “In the absence of major demand drivers, prices remain vulnerable to broader market movements.”
Robust US economic data is boosting the dollar and putting pressure on silver
The latest US economic data shows that the labor market is surprisingly resilient. The Job Openings and Labor Turnover Survey (JOLTS) for August showed an increase of 329,000 vacancies, bringing the total number of vacancies to 8.04 million, compared to 7.711 million in July.
In addition, ADP’s report on Wednesday indicated that private sector employers added 143,000 jobs in September, more than the expected 120,000 new jobs and up from August’s revised figure of 103,000.
These figures have reinforced expectations that the Fed may not implement aggressive interest rate cuts in the near term. Federal Reserve Chairman Jerome Powell recently hinted that the central bank will likely maintain a cautious stance as long as the labor market remains resilient.
As a result, the US dollar has strengthened, making silver more expensive for investors holding other currencies.