Key Highlights

  • Silver traded around USD 60.269 an ounce, down about 0.38 percent daily, though up roughly 25.59 percent year over year.
  • Silver is down nearly 9.99 percent on a monthly basis, reflecting a notable pullback from recent levels.
  • The US economy added just 29,000 jobs in September, well below the 90,000 expected, with Unemployment rising to 4.2 percent.
  • Annual wage growth slowed to 3.0 percent, its weakest pace since May 2021, further reducing October rate hike expectations.

A Steady Finish Despite a Sharp Monthly Pullback

Silver hovered around USD 60 an ounce on Friday, holding relatively steady even as weaker than expected US employment data reinforced expectations that the Federal Reserve may keep interest rates unchanged at its upcoming meeting. The US economy added just 29,000 jobs in September, well below the 90,000 consensus estimate, continuing a pattern of labor market softening that has been building over recent months.

Despite the steady weekly finish, silver remains down nearly 10 percent on a monthly basis, a sizable pullback that suggests the metal has given back a meaningful portion of recent gains even as its year over year performance remains strongly positive at roughly 25.59 percent. This divergence between the monthly decline and robust annual gain points to significant Volatility in the metal's recent trading range.

Labor Market Softness Reduces Near Term Hike Risk

The unemployment rate rose to 4.2 percent, while annual wage growth eased unexpectedly to 3.0 percent, its weakest level since May 2021. The softer labor market data further reduced expectations of an October rate hike, with money markets pricing in a reduced probability of near term tightening, while expectations for a December move have also weakened somewhat following recent Federal Reserve commentary.

Fed officials Philip Jefferson and John Williams both called for more time to assess whether further rate increases are needed to bring Inflation under control, commentary that had already begun shifting rate expectations before the latest jobs data reinforced the dovish tilt. This combination of soft data and cautious Central Bank commentary has created a relatively supportive near term backdrop for silver, even as the metal's sharp monthly decline suggests other forces have been at work.

Industrial Demand and Rate Policy Could Both Matter Going Forward

Should the Federal Reserve hold rates steady as currently expected, reduced real interest rates could continue to support silver alongside gold, particularly if labor market data continues to soften in subsequent reports. Silver's dual role as both a precious metal and an industrial input also means its price trajectory could be influenced by broader Manufacturing and green energy demand trends independent of monetary policy.

Conversely, the sharp monthly decline already recorded suggests the metal may be working through a period of profit taking or repositioning following a strong preceding run, and a Reversal in labor market softness or more hawkish Fed commentary could extend this pullback further. The metal's relatively volatile recent trading range suggests near term price action may remain choppy even within a broadly supportive macro backdrop.

Investment Takeaway

Silver's steady finish near USD 60 an ounce masks a notably volatile month, with the metal still up substantially on a year over year basis despite a sharp recent pullback. Whether silver can stabilize and resume its upward trajectory may depend on confirmation of continued labor market softening and the Federal Reserve's actual policy path at its upcoming meeting. The metal's dual exposure to Monetary Policy and industrial demand trends suggests its near term direction could be shaped by developments beyond the labor market data alone.