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Silver prices (XAG/USD) edged higher on Monday following a sharp 8% decline on Friday, driven by stronger-than-anticipated US Nonfarm Payrolls (NFP) data. The report reinforced market expectations that the Federal Reserve will maintain elevated interest rates for an extended period, weighing on precious metals like silver. The price remains near its 200-day simple moving average (SMA), a critical technical level that traders monitor for trend reversals. A break below this level could signal further downside, while a sustained rebound above it might attract buyers.
The NFP data’s impact on silver highlights the sensitivity of commodities to macroeconomic indicators and central bank policy. Higher interest rates typically reduce the appeal of non-yielding assets like silver, as investors shift toward yield-generating alternatives. This dynamic creates volatility for traders, especially in markets where silver is used both as an industrial metal and a hedge against inflation. The Fed’s rate trajectory will remain a key driver of price action in the near term.
For Gulf and MENA investors, the current technical setup around the 200-day SMA is critical. A sustained move below this level could open the door for a test of key support at $22.50, while a recovery above $24.50 might signal a potential reversal. Traders should also watch the Fed’s upcoming statements for clues on rate-cut timing, as even hints of policy easing could trigger a short-term rebound in silver prices.
