Silver’s recovery has moved from a technical bounce to a macro trade.
The metal climbed for a third session on Thursday, pushing back above $60 an ounce as softer US data, lower oil prices and a less forceful message from Federal Reserve Chair Kevin Warsh eased the pressure on non-yielding assets.
The rally does not mean rate risk has disappeared. But after a brutal monthly slide, traders finally have enough reasons to test whether the worst of the selloff has passed.
Spot silver traded around $60.20 an ounce in Asian hours, extending its rebound after a sharp decline through June.
The move came as the dollar softened and investors reassessed how aggressively the Fed may need to respond to inflation.
Warsh did not turn dovish at the ECB Forum in Sintra. He repeated the central bank’s commitment to the 2% inflation target and defended the Fed’s independence.
But his acknowledgement that inflation risks had eased in recent weeks reduced the sense that an immediate rate increase is unavoidable.
That distinction matters for silver. The metal offers no yield, so it tends to struggle when markets price in higher borrowing costs.
Any pullback in rate-hike urgency can quickly improve sentiment, especially after a steep fall.
Wednesday’s US data added to the case for a less aggressive Fed path. ADP said private employers added 98,000 jobs in June, below forecasts and down from 122,000 in May.
The ISM manufacturing index also eased to 53.3 from 54, while its prices-paid gauge fell sharply.
The numbers did not point to a weak economy. They did, however, suggest that labour demand and factory momentum are cooling at the margin.
For traders, that is enough to take some heat out of the hawkish Fed trade before the nonfarm payrolls report.
The market focus now shifts to Thursday’s official jobs data. A softer payrolls print would strengthen silver’s recovery case by weighing on the dollar and yields.
A stronger number could quickly revive expectations that the Fed will have to tighten again.
Silver also drew support from the energy market. Oil fell after indirect US-Iran talks in Doha ended with some progress but no final settlement.
Brent slipped towards $70 a barrel as investors judged that immediate supply risks around the Strait of Hormuz had eased.
Lower crude prices are important because they reduce one of the main inflation threats that had been feeding rate-hike expectations.
That gives precious metals some relief, even though geopolitical risks have not vanished.
For now, silver’s rebound looks credible but not risk-free.
The metal has recovered the $60 level, yet the next move depends heavily on US payrolls, the dollar and whether oil stays calm.
Without confirmation from those drivers, the rally may remain vulnerable to another round of selling.