Silver Faces Twin Headwinds: Robust US Jobs Data and Stalled Ceasefire Talks Keep Prices Under Pressure

Silver fell 2.24% last week as a robust US jobs report dims rate-cut hopes, while Middle East tensions and weakening solar demand add pressure, leaving the metal caught between safe-haven and inflation fears.

Silver stumbled into the new trading week, caught between a resilient US labour market that dims rate-cut hopes and renewed geopolitical tensions in the Middle East that could stoke inflation. The metal closed Friday at $74.12 an ounce, up 1.57% on the day but down 2.24% for the week—a short-term bounce that did little to repair the broader damage.

The immediate trigger came from Washington, where the US Department of Labor reported 172,000 new non-farm jobs in May, nearly double the 85,000 analysts had expected. The unemployment rate held steady at 4.3%, while average hourly earnings rose 3.4% year-on-year, adding to inflation worries. For a metal that pays no yield, a strong labour market is bad news: it gives the Federal Reserve little reason to ease policy, and borrowing costs that stay high raise the opportunity cost of holding silver.

Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, has already warned that the central bank must either remain patient with rates or raise them further to contain price pressures. Mary Daly of the San Francisco Fed echoed the cautious tone, saying policy will depend on incoming data. The CME FedWatch tool now puts a 51% probability on a rate hike by December—a headwind that keeps silver under pressure.

Geopolitics add another layer of complexity. Over the weekend, Reuters reported that the Iran-backed Hezbollah group rejected a new ceasefire in Lebanon, while Israel said it would not withdraw troops from the country. The setback to hopes for rapid regional de-escalation can, in theory, boost safe-haven demand for precious metals. But it also threatens to lift energy prices and inflation expectations, reinforcing the very rate fears that are hurting silver.

The metal’s dual nature makes it especially vulnerable in such an environment. Unlike gold, silver has a significant industrial component, and that industrial side is showing cracks. The Silver Institute projects a sixth consecutive supply deficit in 2026, with total supply slipping modestly to around 33,100 tonnes. Yet demand from the solar industry—a key user—is weakening as manufacturers cut costs and adopt alternative materials. Silver offtake in photovoltaics is forecast to drop from 5,804 tonnes to 4,698 tonnes. Robust investment buying will need to fill the gap.

Physical markets in Asia offer little relief. Gold demand in India remains subdued due to volatile foreign prices, and premiums in China have softened. Without strong physical buying, silver finds it harder to offset pressure from the dollar, rising bond yields, and hawkish Fed expectations.

Chart-wise, the metal is nursing clear wounds. It has lost 4.11% over the past 30 days, though it still shows a year-to-date gain of 2.57%. The price stands 3.03% below its 50-day moving average, and the relative strength index at 44.4 points to neither oversold conditions nor imminent technical relief.

For the week ahead, the macro picture sets the tone. If strong US data keeps yields elevated, silver will remain vulnerable even with geopolitical jitters in play. A breakthrough in ceasefire talks could lower the inflation premium and give the metal breathing room—but for now, the scales are tilted toward caution.