Gold (XAU) Silver (XAG) Daily Forecast: Trade Tensions Boost Metals, US NFP in Focus

Analysts anticipate that if upcoming U.S. job data shows signs of a weakening labor market, the Fed may be compelled to cut rates, further strengthening gold’s bullish outlook.

Silver Faces Headwinds as Industrial Demand Wavers

Silver (XAG/USD) is under pressure, trading at $32.17 after hitting a low of $32.13. Market caution ahead of the U.S. Nonfarm Payrolls (NFP) report has limited silver’s upside potential, as investors await signals on the Fed’s next move. A stronger-than-expected jobs report could bolster the U.S. dollar, weighing on silver prices.

Moreover, silver, which has significant industrial applications, faces added strain from ongoing trade tensions. Concerns over weaker manufacturing demand due to disrupted supply chains have restrained silver’s bullish momentum. However, if the Fed signals a more dovish stance, silver could find support from lower Treasury yields.

U.S. Job Data and Fed Policy Shape Market Outlook

The latest U.S. jobless claims report showed an increase to 219,000 from the previous 208,000, signaling potential weakness in the labor market. This has strengthened expectations that the Fed may pursue further rate cuts in 2025. U.S. Treasury Secretary Scott Bessent indicated that while the administration is less concerned with the Fed’s policy direction, it remains focused on lowering 10-year Treasury yields.

Meanwhile, Federal Reserve officials remain divided on inflation risks. Chicago Fed President Austan Goolsbee downplayed inflation concerns, while Dallas Fed President Lorie Logan noted that the labor market remains strong enough to delay rate cuts. Despite mixed signals, the U.S. dollar failed to gain significant traction, allowing gold to maintain its upward momentum.

As investors prepare for the upcoming NFP report, all eyes remain on employment trends. If job growth weakens, gold prices could extend their rally on expectations of looser monetary policy. Conversely, a strong labor market reading may boost the dollar and put pressure on gold.