Silver (XAG) Forecast: ADP Data and Fed Minutes Hold the Key to Silver’s Next Move

Silver Steadies as Traders Await Economic Data and Fed Signals

Silver prices are holding firm midweek as traders await key economic data that could drive market volatility. Bullish sentiment is building after silver crossed the 200-day moving average at $29.90, reinforcing buyer strength.

Staying above this level points to upside targets at $30.54 and $30.79 – the pivot and 50-day moving average. A breakout above these levels could trigger momentum toward $32.33. On the downside, losing the $29.90 handle risks a drop to $29.56, which serves as short-term support.

At 11:48 GMT, XAG/USD is trading $30.12, up $0.07 or +0.24%.

Treasury Yields Hold as Focus Shifts to Jobs Data and Fed Minutes

U.S. Treasury yields remain steady as investors await labor market data and the Federal Reserve’s December meeting minutes. The 10-year yield sits at 4.697%, holding its highest level in eight months, while the 2-year yield hovers near 4.304%.

Recent data revealed stronger-than-expected job openings and higher services sector prices, suggesting the Fed may hold rates steady longer. The ADP report is expected to show 130,000 jobs added in December, ahead of Friday’s nonfarm payrolls. Traders are looking for signs of labor market cooling that could influence Fed policy and boost silver prices.

Stronger Dollar Weighs on Silver

The dollar firmed following solid U.S. data, dampening expectations for aggressive Fed rate cuts. The dollar index rose to 108.55, while the greenback hit a six-month high against the yen at 157.875.

The ISM non-manufacturing PMI climbed to 54.1, reflecting economic resilience, while input prices surged, signaling inflationary pressures. Markets now see a 95% chance the Fed will hold rates this month, with the first cut likely in July. A stronger dollar presents headwinds for silver, limiting gains.

Tariff Uncertainty Lifts Silver’s Safe-Haven Appeal

Silver continues to draw support from geopolitical risks tied to President-elect Donald Trump’s tariff policies. Fears of trade wars and inflation have increased silver’s safe-haven appeal. However, rising interest rates could limit gains, creating mixed signals for traders.

Investors are closely watching the ADP report and jobless claims. Weak labor data could reinforce bets on rate cuts, lifting silver, while strong figures may delay easing and weigh on prices.

Outlook: Silver Hinges on Economic Data and Technical Levels

Silver’s near-term direction depends on labor data and Fed policy signals. A dovish tone in the Fed minutes could fuel bullish momentum, while hawkish commentary risks selling pressure.

Technically, silver must stay above the 200-day moving average to sustain upward momentum. A close below this level increases the risk of a pullback to $29.81. A breakout above $30.79 could trigger a rally toward $32.33, signaling potential for further upside.

Traders should brace for volatility, with silver likely to react sharply to labor market surprises and shifting Fed rate expectations.

More Information in our Economic Calendar.