- Silver prices have approached their highest levels since February 2012.
- Weak economic indicators may boost safe haven demand, increasing the likelihood of a Federal Reserve rate cut.
- In May, the US added 130,000 jobs, but the unemployment rate is projected to remain steady at 4.2%.
Silver prices (XAG/USD) are maintaining strength for the second consecutive session, hovering near the highest levels seen since February 2012. Currently, prices are around $36.00 per troy ounce during Friday’s Asian trading hours.
The demand for precious metals, including silver, is expected to rise as safe havens become more appealing due to disappointing economic data from the US. This has heightened expectations for potential cuts in Federal Reserve rates. Notably, the first weekly unemployment claims increased to 247,000, surpassing the anticipated figure of 235,000.
In Wednesday’s report, US ADP private sector employment rose by only 37,000 in May, which was significantly lower than the market expectation of 115,000. Additionally, the ISM Services Purchasing Managers Index (PMI) dropped from 51.6 in April to 49.9 in May, falling short of the expected 52.0.
Traders are also keeping an eye on upcoming US non-farm payroll data, with expectations to add 130,000 jobs in May, down from the 177,000 gain seen in April. The unemployment rate is anticipated to remain unchanged at 4.2%.
However, the positive discussions between US President Donald Trump and Chinese President Xi Jinping might dampen the allure of safe haven silver, as market sentiment appears to be improving. Trump described the call as constructive and indicated a willingness to move forward with tariff negotiations.
On Monday, traders can expect a range of data releases from China, such as consumer and producer price indices and trade statistics. Given China’s significant role as a global manufacturing powerhouse, its industrial demand for silver is crucial.
