Silver is trading positively near $51.00 during Asian hours, despite the US government’s recent shutdown ending. Federal Reserve officials, like John Williams and Neel Kashkari, are speaking later today, creating anticipation for the release of delayed economic reports. The US Nonfarm Payrolls report due on Thursday could impact the Federal Reserve’s rate decision in December. If the US labor market shows signs of weakness, it may weaken the US Dollar and boost the price of silver, which is priced in USD. However, a hawkish tone from Fed officials has made traders nervous, possibly affecting silver prices.

Chance of a Rate Cut

Currently, the chance of a 25 basis points rate cut in December is nearly 40%, according to the CME FedWatch tool. Silver is a popular asset due to its historical value and potential as a hedge. Investors often trade silver through physical purchases and ETFs. Silver prices are influenced by geopolitical events, interest rates, and the strength of the US Dollar. As an important industrial metal, demand for silver in electronics and solar energy affects its price. Silver also tends to follow gold price trends, and the Gold/Silver ratio helps assess their relative values. With silver near $51.00, we face considerable uncertainty after the US government shutdown. The key event this week is the Nonfarm Payrolls (NFP) report on Thursday, which will significantly impact the Federal Reserve’s decisions. We should closely watch speeches from Fed officials today for hints about their views. We suspect there may be a weaker-than-expected payroll figure, especially since job growth has been slowing in reports from September and October 2025. A disappointing number could increase the chances of a Fed rate cut in December, likely weakening the US Dollar and pushing silver prices up. Derivative traders might see this as an opportunity to explore call options for a potential rally.

Market Uncertainty and Potential Effects

However, we must also consider the risk of hawkish comments from the Fed due to ongoing inflation concerns, which remain above target. Recent data from late October 2025 showed the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s favored inflation measure, stubbornly holding at 3.7% year-over-year. A strong jobs report alongside this persistent inflation could lower rate cut chances, driving silver prices down. This uncertainty is reflected in the market, where the odds of a December rate cut have dropped from over 60% earlier this month to around 40%. Such mixed sentiment often leads to price volatility, and we expect increased fluctuations around Thursday’s data release. This environment might favor strategies that could profit from significant price movements in either direction. Looking at the bigger picture, recent manufacturing PMI data from China has shown a slight decline, suggesting that industrial demand for silver may face challenges. Conversely, the gold-to-silver ratio is currently around 86, a historically high level, indicating that some traders believe silver may be undervalued compared to gold. These elements add more considerations when planning for the upcoming weeks. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now