Silver (XAG/USD) sustained its strength for a second consecutive session, hovering near its highest level since February 2012 at around $36.00 per troy ounce during Asian trading on Friday.
The surge in precious metals prices, including silver, reflects growing safe-haven demand triggered by disappointing US economic data that has heightened expectations for Federal Reserve interest rate cuts. Weekly Initial Jobless Claims rose to 247,000 on Thursday, surpassing the anticipated 235,000, signaling a weakening labor market.
Further evidence of economic softness came Wednesday with the US ADP private sector employment posting a modest 37,000 gain in May—well below the forecasted 115,000. Meanwhile, the ISM Services PMI slipped to 49.9 in May from 51.6 in April, falling short of the expected 52.0 and indicating contraction in the service sector.
Ahead of Friday’s crucial US Nonfarm Payrolls report, traders remain cautious. The report is projected to show 130,000 new jobs added in May, down from April’s 177,000 increase, while the unemployment rate is expected to stay steady at 4.2%.
Despite silver’s safe-haven appeal, gains could be capped as market sentiment improved after a constructive phone call between US President Donald Trump and Chinese President Xi Jinping. Trump described the discussion as productive and signaled readiness to continue tariff negotiations, easing some trade tensions.
Looking ahead, market participants will closely watch Monday’s data releases from China, including consumer and producer price indices and trade figures. As a major global manufacturing hub, China’s industrial demand plays a pivotal role in silver’s price dynamics.
