Silver price forecast: bulls eye next breakout as dollar pressure fades

Silver’s rebound is gathering force because the market is no longer trading only on fear.

The white metal climbed for a fourth straight session on Friday, pushing above $62 an ounce as a weak US jobs report forced investors to rethink how soon the Federal Reserve may raise rates again.

Lower energy stress and a softer dollar added to the relief trade. But this is still a rebound inside a fragile macro setup, not a clean all-clear.

The next inflation print could still decide whether the rally has room to run.

Jobs miss changes the rate argument

Spot silver traded around $62.60 an ounce in Asian hours, extending a recovery that has lifted the metal from last week’s lows.

The trigger was Thursday’s US employment report, which showed nonfarm payrolls rising by just 57,000 in June, far below the market forecast of about 1,10,000.

The unemployment rate eased to 4.2% from 4.3%, but the improvement was less reassuring than it looked. Labour-force participation fell, suggesting fewer people were looking for work.

That made the headline jobless-rate drop a weaker signal of strength.

For silver, the data mattered because it cooled the case for an imminent Fed hike.

Futures pricing showed the implied odds of a September move falling into the low-to-mid 50% range from about 66% before the report.

Lower rate expectations tend to support silver because the metal does not pay interest.

Fed relief meets inflation caution

The Fed story, though, has not fully turned in silver’s favour.

Chair Kevin Warsh used his Sintra appearance to stress the central bank’s 2% inflation target and its independence, even as he acknowledged that inflation expectations and risks had eased over the past month.

That leaves markets in a middle ground. The labour data argues against rushing into another increase, but the Fed still needs proof that inflation pressure is fading more broadly.

If upcoming CPI or PPI numbers look sticky, rate-hike bets could rebuild quickly.

That is why silver’s bounce looks powerful but still data-dependent.

The metal has regained momentum, but it remains exposed to the same forces that drove the earlier selloff: yields, the dollar and Fed communication.

Oil calm adds another tailwind

Energy markets are also helping. Brent crude has steadied near $72 a barrel after a sharp retreat from war-risk levels, as traders grew more confident that flows through the Strait of Hormuz were recovering.

Progress in US-Iran diplomacy has reduced the immediate risk premium, even though a lasting settlement is not yet secure.

Lower oil prices reduce one source of inflation pressure and make it easier for markets to price a less aggressive Fed.

That is the key reason silver is rallying alongside gold and other precious metals.

The next test is whether this move can survive fresh US inflation data. Until then, silver’s rebound looks real, but not risk-free.