Battle for the $60 mark: Silver faces non-farm payrolls test after two consecutive days of gains, direction remains uncertain.
2026-07-02 16:28:00
Silver prices are on track for a third consecutive trading day during the European session on Thursday (July 2), currently trading around $60 per ounce.
Federal Reserve Chairman Warsh's speech at the Sintra Forum on Wednesday was more dovish than the market expected, which, combined with the plunge in oil prices and weak US economic data, provided multiple supports for silver.
Market focus has shifted to tonight's non-farm payroll report, the results of which will determine the short-term direction of silver prices.
Warsh's speech at the Sintra Forum on Wednesday was one of the core drivers of the recent rebound in silver prices. While acknowledging that inflation remains too high and reiterating the Federal Reserve's firm commitment to the 2% target and institutional independence, he also pointed out that inflation expectations have eased over the past month, meaning the urgency to raise interest rates has decreased.
More importantly, he did not provide clear guidance on the July policy decision, leaving room for the market to reassess the Fed's next move.
Evercore analyst Krishna Guha's interpretation is quite representative: "At least, his comments did not provide any fuel for speculation about a July rate hike." The market had already fully priced in a hawkish stance, and the actual statement being "below expectations" triggered profit-taking by dollar bulls, providing upward space for dollar-denominated silver prices.
The sharp downturn in the global energy market further boosted silver prices. The significant drop in benchmark crude oil prices was primarily driven by the rapid recovery of maritime traffic in the Strait of Hormuz, which greatly alleviated supply anxieties and inflation concerns.
Significant breakthroughs have been achieved in indirect diplomatic negotiations between Washington and Tehran, further depressing geopolitical risk premiums across assets.
For silver, the decline in oil prices is beneficial in two ways: first, it lowers global inflation expectations, reducing the need for the Federal Reserve to aggressively raise interest rates; second, as an inflation hedge, silver gains support from safe-haven buying in an environment where inflation anxiety subsides.
U.S. economic data released on Wednesday further cooled hawkish sentiment surrounding the Federal Reserve.
The ADP employment report showed that private sector jobs increased by only 98,000 in June, lower than the market expectation of 113,000 and also lower than May's 122,000. The ISM manufacturing PMI fell to 53.3 from 54 in May, also below the expected 54.
These two sets of data together paint a picture of a moderate cooling of the US economy.
For silver, weaker economic data reduced the need for aggressive interest rate hikes by the Federal Reserve, and the lowered ceiling on interest rate expectations provided additional support for silver prices.
Tonight's US June non-farm payroll report will be a key catalyst for the short-term direction of silver.
The market expects 110,000 new jobs and an unemployment rate of 4.3%. However, given the weak performance of Wednesday's ADP and ISM reports, the non-farm payrolls report faces some downside risks.
If the data is weak, the US dollar will come under further pressure, and silver prices are expected to challenge the 60.00-61.00 range; if the data is strong, expectations of a Fed rate hike will be reinforced, and silver prices may see a pullback.
However, silver prices have risen continuously, with strong short-term momentum and relatively solid technical support.
At 16:27 Beijing time on July 2, spot silver was trading at $59.90 per ounce.
Federal Reserve Chairman Warsh's speech at the Sintra Forum on Wednesday was more dovish than the market expected, which, combined with the plunge in oil prices and weak US economic data, provided multiple supports for silver.
Market focus has shifted to tonight's non-farm payroll report, the results of which will determine the short-term direction of silver prices.
Warsh's speech: Less hawkish than expected, reducing the urgency of raising interest rates.
Warsh's speech at the Sintra Forum on Wednesday was one of the core drivers of the recent rebound in silver prices. While acknowledging that inflation remains too high and reiterating the Federal Reserve's firm commitment to the 2% target and institutional independence, he also pointed out that inflation expectations have eased over the past month, meaning the urgency to raise interest rates has decreased.
More importantly, he did not provide clear guidance on the July policy decision, leaving room for the market to reassess the Fed's next move.
Evercore analyst Krishna Guha's interpretation is quite representative: "At least, his comments did not provide any fuel for speculation about a July rate hike." The market had already fully priced in a hawkish stance, and the actual statement being "below expectations" triggered profit-taking by dollar bulls, providing upward space for dollar-denominated silver prices.
Oil price plunge: Resumption of cross-strait shipping alleviates inflation anxiety
The sharp downturn in the global energy market further boosted silver prices. The significant drop in benchmark crude oil prices was primarily driven by the rapid recovery of maritime traffic in the Strait of Hormuz, which greatly alleviated supply anxieties and inflation concerns.
Significant breakthroughs have been achieved in indirect diplomatic negotiations between Washington and Tehran, further depressing geopolitical risk premiums across assets.
For silver, the decline in oil prices is beneficial in two ways: first, it lowers global inflation expectations, reducing the need for the Federal Reserve to aggressively raise interest rates; second, as an inflation hedge, silver gains support from safe-haven buying in an environment where inflation anxiety subsides.
US data shows "double weakness": ADP and ISM both missed expectations.
U.S. economic data released on Wednesday further cooled hawkish sentiment surrounding the Federal Reserve.
The ADP employment report showed that private sector jobs increased by only 98,000 in June, lower than the market expectation of 113,000 and also lower than May's 122,000. The ISM manufacturing PMI fell to 53.3 from 54 in May, also below the expected 54.
These two sets of data together paint a picture of a moderate cooling of the US economy.
For silver, weaker economic data reduced the need for aggressive interest rate hikes by the Federal Reserve, and the lowered ceiling on interest rate expectations provided additional support for silver prices.
Non-farm payroll report: the biggest short-term variable
Tonight's US June non-farm payroll report will be a key catalyst for the short-term direction of silver.
The market expects 110,000 new jobs and an unemployment rate of 4.3%. However, given the weak performance of Wednesday's ADP and ISM reports, the non-farm payrolls report faces some downside risks.
If the data is weak, the US dollar will come under further pressure, and silver prices are expected to challenge the 60.00-61.00 range; if the data is strong, expectations of a Fed rate hike will be reinforced, and silver prices may see a pullback.
However, silver prices have risen continuously, with strong short-term momentum and relatively solid technical support.
At 16:27 Beijing time on July 2, spot silver was trading at $59.90 per ounce.
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