Silver (XAG) Forecast: Rally Stalls Below 50-Day Average After Strong U.S. Payrolls

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Fed Rate-Cut Hopes Pushed Back After Jobs Surprise

April’s nonfarm payrolls report was the key driver of Friday’s price action. The U.S. economy added 177,000 jobs—well above forecasts—while the unemployment rate held at 4.2% and hourly earnings rose 3.8% year-on-year. Though backward-looking, the report signaled a still-resilient labor market despite recent tariff uncertainty, giving the Fed little reason to cut rates soon.

Following the release, traders trimmed bets on a June rate cut, with the market now pricing in the first potential move in July. This repricing lifted the U.S. 10-year Treasury yield over 7 basis points to 4.308% and the 2-year by more than 12 basis points to 3.828%, directly pressuring silver, which offers no yield and tends to underperform when rates are rising or stable.

Tariff Concerns Offset by China’s Willingness to Talk

Trade developments between the U.S. and China provided some relief but lacked the immediacy to support silver prices. China’s commerce ministry confirmed that the U.S. had reached out to restart tariff talks, and Beijing stated its door remains open. However, China also made it clear that meaningful progress requires Washington to cancel existing unilateral tariffs—currently at 145%, with 125% retaliatory tariffs from China in place. Traders welcomed the diplomatic tone but saw little change in the near-term inflation or growth risks posed by tariffs.