HG MARKETS:

The price of silver (XAG/USD) extended its rebound on Monday, reaching approximately $37.30, building on Friday’s upward momentum. The recovery in the white metal is primarily attributed to a sharp decline in U.S. Treasury yields, which followed the release of a weaker-than-expected U.S. Nonfarm Payrolls (NFP) report for July. With demand for silver typically rising in low-yield environments, investor interest has shifted toward non-interest-bearing assets in response to deteriorating labor market indicators.
The latest NFP report revealed that the U.S. economy added only 73,000 new jobs in July, significantly missing consensus expectations of 110,000. Compounding the weakness, June’s employment numbers were revised sharply downward to 14,000, from an initial reading of 147,000. Despite the softer job creation, the unemployment rate rose modestly to 4.2%, in line with market expectations but higher than the previous month’s reading of 4.1%. These figures suggest a notable cooling in labor market conditions, thereby influencing monetary policy expectations.

In response to the soft labor data, U.S. bond yields have declined notably, though the 10-year Treasury yield remains marginally higher at press time, hovering near a three-month low around 4.20%. Lower yields generally reduce the opportunity cost of holding non-yielding assets such as silver, reinforcing its attractiveness in the current macroeconomic environment. The inverse relationship between bond yields and silver prices continues to be a key driver in precious metal markets.
Market participants are increasingly pricing in the prospect of interest rate cuts by the Federal Reserve in the coming months. According to the CME Fed Watch Tool, the probability of a rate cut at the Fed’s September policy meeting has surged to 80.8%, up significantly from 41.2% recorded just one day before the NFP data release. This substantial shift reflects heightened expectations of a dovish policy pivot, which has further supported silver prices in the short term.
From a technical perspective, silver recently retraced to the 50-day Exponential Moving Average (EMA) near $36.60, which appears to have acted as a dynamic support level. However, the 14-day Relative Strength Index (RSI) remains below the neutral 50 mark, indicating a lack of strong bullish momentum. On the downside, immediate support lies at the June 24 low of $35.28, while the next critical resistance is positioned near the June 30 high of $38.25. Market direction will likely remain data-dependent, with further economic releases and central bank signals guiding investor sentiment in the near term.