FX.co ★ Silver Jumps After Soft US Payrolls

On Friday, silver experienced a notable increase, climbing over 1.5% to surpass $78.2 per ounce. This uptick was influenced by a softer U.S. job market, which bolstered expectations for Federal Reserve rate cuts and renewed interest in precious metals following a period of declining pressure from index-driven sales. The December nonfarm payrolls showed an increase of only 50,000 jobs, falling short of predictions. However, the unemployment rate dropped to 4.4%, highlighting a labor market characterized by low hiring and firing, which supports the prospect of lower interest rates rather than further tightening. This shift alleviated the pressure from real yields and prompted new long positions and short covering in silver futures as mechanical selling related to annual commodity index rebalancing began to ease. While geopolitical concerns in Venezuela and East Asia offered additional support, the primary driver of the rebound was the re-evaluation of U.S. interest rates, with thin liquidity intensifying the upward trend after two days of significant liquidation.