There was good news for investors on Friday, as the price of silver surged following a disappointing U.S. employment report which saw the Dollar trend lower. Gold prices also saw a rise, giving a welcome boost to the precious metals markets.
Silver Responds to Weak NFP Data
The non-farm payroll (NFP) is a monthly report of the U.S labour market, which measures the net change in employment, excluding farm workers and non-profit organisations. The NFP report often greatly affects the US Dollar, and in turn, gold and silver.
Worse than expected NFP data was reported last week. The report showed that the rate of new jobs being added to the world’s largest economy slowed in August, showing the key non-farm payrolls up only 235k, compared to the rise of 720k that was expected. This weighed heavy on the dollar, which in turn helped to boost both gold and silver prices.
Silver has been on a downward slope since the beginning of June. However, after a tough few months, silver prices have now perked up in response to this latest NFP data, hitting a four-week high on Friday 3rd September, and possibly signalling a new upwards trajectory.
Is Silver Regaining Its Shine?
Starting the week hovering around the £17.45 mark, then hitting a weekly low of £17.29 on Thursday, Friday saw the silver price suddenly jump over 3.3% to £17.95 in just a few short hours.
The question is: can silver continue the upward momentum it started on Friday?
As always, we cannot say for certain as our favourite precious metals can often surprise us. However, the outlook may be positive.
The negative payroll data in the August NFP report show that the US economy and the dollar may again be struggling, possibly due to rising Covid-19 Delta cases impacting industry, and may once again need support. The Federal Reserve will have closely watched the report, as it helps to determine future monetary policy.
Charts show that right now, silver appears to be recovering from its long-term downtrend, reclaiming its shine after a dull few months.
Supported by increased investment and industrial demand, silver’s appeal may not tarnish yet. As the global economy faces further headwinds down the line, this could mean further positives in the outlook for silver on the horizon, as the allure of investing in precious metals to support our financial future remains strong in a world of economic uncertainty and mounting global debt.
And, as we know, uncertainty is always a key player in the world of precious metals.
This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.