Silver rose during Asian trading on Thursday, recovering some ground after a sharp sell-off in the previous session, as investors weighed geopolitical risks against incoming US labour-market data.
Spot silver gained 1.2% to trade near $73.60, with XAG/USD quoted around $73.35 at the time of reporting.
The rebound offered some relief after recent selling, but the broader tone remained cautious as prices stayed below key technical levels.
Traders are now looking to Friday’s US Nonfarm Payrolls report for fresh direction after stronger-than-expected private payrolls data reinforced the view that the Federal Reserve may have less room to ease policy.
Iran blockade risk clouds outlook
Geopolitics remained one of the main drivers for precious metals.
On Wednesday, President Donald Trump told The New York Post’s “Pod Force One” that a US maritime blockade of Iranian sea ports “could last until Labor Day,” while adding that he did not expect that outcome.
If the blockade were to remain in place until September 7, it would point to a prolonged period of tension and no durable resolution to the conflict.
Continued restrictions around Iranian ports could also raise concerns about energy flows through the Strait of Hormuz, a critical route for global oil shipments.
That risk has complicated the outlook for silver.
While precious metals can benefit from safe-haven demand during geopolitical stress, silver has underperformed since the start of the Middle East war as higher oil prices fuelled inflation concerns.
Those pressures have changed how traders view the Fed’s policy path. Before the conflict, markets had been looking for two US interest rate cuts.
Since then, higher energy prices and inflation risks have encouraged investors to price in a more hawkish stance from the central bank.
For silver, that is a headwind. The metal does not offer a yield, making it more vulnerable when interest rates remain elevated or when traders expect borrowing costs to stay higher for longer.
US jobs data takes centre stage
Economic data is also shaping the near-term outlook.
The May ADP Employment Change showed 122,000 jobs were added in the US private sector, above expectations for 117,000 and the previous reading of 105,000.
The stronger figure set a firmer tone before Friday’s Nonfarm Payrolls report, which is likely to be closely watched by traders seeking clues on the Fed’s next move.
A resilient labour market could strengthen the case for the central bank to keep rates elevated, particularly if policymakers remain concerned about inflation risks linked to higher energy costs.
That would likely weigh on silver by supporting the dollar and keeping real yields firm.
A weaker-than-expected payrolls reading, however, could ease some of those concerns and offer support to precious metals.
Technical picture remains fragile
Despite Thursday’s rebound, silver’s technical setup remains under pressure.
XAG/USD is still trading below its 20-day Exponential Moving Average at $76.02, a level that traders are likely to watch closely for signs of a stronger recovery.
The Relative Strength Index is near 43, below the neutral 50 line. That suggests selling pressure has eased but has not yet given way to a clear bullish reversal.
A sustained move above the 20-day EMA at $76.02 would help ease the near-term bearish bias and could open the way towards the May 25 high of $78.83.
On the downside, a decisive break below the May 28 low of $71.79 would expose the April 7 low of $68.28, signalling that sellers remain in control.
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