The price of silver continued its upward trend for the third consecutive session, reaching approximately $28.50 per troy ounce during Friday’s Asian trading session. The surge in silver’s value is attributed to recent employment data from the United States, which suggests a more accommodative monetary policy stance by the Federal Reserve (Fed).
The unexpected increase in US Initial Jobless Claims to over 8-month highs indicates a weakening labor market, potentially prompting the Fed to initiate monetary easing sooner rather than later. Lower interest rates tend to boost the appeal of non-yielding assets like silver.
The US Bureau of Labor Statistics (BLS) reported that Initial Jobless Claims for the week ending May 3 surpassed expectations, rising to 231K compared to estimates of 210K and exceeding the previous week’s figure of 209K. Traders are now awaiting next week’s Consumer Price Index (CPI) and Producer Price Index (PPI) releases for further insights into the Fed’s monetary policy, considering reservations expressed by some Fed officials regarding easing measures.
Additionally, silver saw increased demand as a safe-haven asset amid geopolitical tensions. The deadlock in ceasefire negotiations in the Middle East led to heightened tensions, with Israeli forces mobilizing near populated areas of Rafah and engaging in gunfire on Thursday. This escalation followed President Joe Biden’s statement that the US would withhold weapons from Israel in the event of a substantial invasion of southern Gaza, as reported by Reuters.
These geopolitical developments, coupled with the dovish signals from US employment data, have bolstered silver’s appeal as a hedge against uncertainty, driving its price higher in the Asian trading session. Market participants will continue to monitor economic indicators and geopolitical events closely for further market direction and potential impact on silver prices.
