Silver Prices Soar This Week, What's Behind It?

Silver prices were buoyant throughout the week after the US economy unexpectedly shed jobs in July, weakening the case for further interest rate hikes by the Federal Reserve. According to Refinitiv, silver closed the final trading session of the week on Friday at US$63.54 per troy ounce, a surge of 3.37% from the previous day. Over the week, the price soared 10.27% on a point-to-point basis. US non-farm payrolls fell by 23,000 in July, compared to expectations for an increase of around 80,000. June’s figure was revised down to a gain of 20,000 and May’s to 63,000, bringing the 12-month average down to 34,000 jobs. The unemployment rate edged down to 4.1%, while labour force participation fell to 61.4%, its lowest in more than five years. The report marked the first monthly contraction in payrolls since February 2026 and added to evidence that the labour market is losing momentum just as the Fed weighs persistent inflation against signs of weakening employment. Interest rate markets quickly repriced following the data, lowering expectations for a Fed hike in September. The yield on US Treasury bonds also fell to 4.617%, a seven-day low. ‘Two days of falling bond yields and a week of dollar weakness appear to have removed various obstacles blocking the path of gold and silver,’ independent metals trader Tai Wong told Reuters. The reaction partially reversed earlier pressure on precious metals, when investors were bracing for the possibility that stubborn inflation would force the Fed to maintain tight monetary policy. Silver typically benefits from lower interest rate expectations because bullion offers no yield, making it relatively more attractive when returns on interest-bearing assets decline. Falling yields can also weigh on the US dollar, reducing the cost of the metal for buyers using other currencies. The July employment report complicates the Fed’s next decision, as policymakers must now balance inflation concerns against a labour market that saw a total decline in payrolls and weaker hiring in prior months.