Silver price (XAGUSD) increased marginally to almost $28.00 per one troy ounce. Non-yielding resources like silver gain traction as the probability of a 25 basis-point rate reduction from the Federal Reserve (Fed) at the September meeting rises due to weak employment data.
Nonfarm Payroll Outlook
According to the US Bureau of Labor Statistics (BLS), nonfarm payrolls (NFP) introduced 142,000 employment opportunities in August. This was an increase over the downwardly modified graph of 89,000 in July but still below the projected increase of 160,000. As anticipated, the unemployment rate decreased from 4.3% to 4.2% in the preceding month.
Since owning non-yield-bearing currency assets has less opportunity cost, lower interest rates usually profit silver. Based on the CME FedWatch Tool, markets fully expect the Federal Reserve to cut interest rates by a minimum of 25 basis points (bps) at its next meeting in September.
Fed Official's Comment On the US Economy
Furthermore, as reported by CNBC, Chicago Fed President Austan Goolsbee stated on Friday that Fed officials are beginning to share the wider economy's view that the US central bank will soon modify policy rates.
With the current alleviation of conflicts in the Middle East, safe-haven flows could restrict Silver's possible profits. Reuters reports that Israeli forces have left Jenin, referring to the Palestine news organization WAFA.
