02.08.2025 15:02

Silver prices rebounded, surpassing the $36.50 level on Friday, after unexpectedly weak US jobs data fueled speculation of an imminent Federal Reserve interest rate cut. This upward movement reversed earlier losses experienced by the precious metal.

The July Nonfarm Payrolls report, released by the US Bureau of Labor Statistics, significantly undershot expectations. A mere 73,000 jobs were added to the economy, considerably less than the projected 110,000, while June's figures were also revised downwards to a meager 14,000 from an initial 147,000. This underwhelming report contributed to a broad weakening of the US dollar.

Despite the unemployment rate rising slightly to 4.2% (in line with forecasts) and steady wage growth (0.3% month-over-month and 3.9% year-over-year), the weak jobs data overshadowed these metrics. Furthermore, while the S&P Global Manufacturing PMI showed a marginal improvement to 49.8, the more influential ISM Manufacturing PMI fell to 48.0, indicating continued contraction in the manufacturing sector.

The unexpectedly soft economic indicators prompted a significant drop in US Treasury yields. Consequently, market sentiment shifted dramatically, reigniting expectations of a Federal Reserve rate cut as early as September. This anticipation, reflected in an 82% probability priced into the CME Fed Watch Tool for a September rate cut, weakened the US dollar significantly, boosting demand for assets like silver that don't offer interest yields. This increased demand was a key driver behind silver's price recovery.