Silver Speculators Caught Offside as Robust US Jobs Report Triggers Sell-Off

Silver tumbled below its 50-day moving average after stronger-than-expected US employment data dashed rate-cut hopes, squeezing overly bullish speculators and intensifying macro headwinds.

The silver market saw a sharp reversal on Friday after stronger-than-expected US employment data upended the rate-cut narrative, punishing a speculative community that had just increased its bullish bets. The white metal settled at $74.12 per ounce, roughly three percent below its 50-day moving average — a level that now looms as a key battleground.

The Commodity Futures Trading Commission’s weekly Commitment of Traders report, released Friday but reflecting positions as of Tuesday, June 2, reveals how poorly timed the latest wave of speculative buying was. Large speculators in COMEX silver futures held a net long position of 23,926 contracts, up from 22,223 the prior week. They had been adding to longs and trimming shorts just days before the jobs data hit. On the other side, commercial traders expanded their net short position to 42,661 contracts, with total open interest at 102,809 contracts.

The macro trigger came from Washington, where the Bureau of Labor Statistics reported 172,000 new nonfarm payrolls for May, well above the consensus expectation of just 85,000. The unemployment rate held steady at 4.3 percent. Average hourly earnings rose 3.4 percent year-on-year, adding to inflation concerns. For a non-yielding asset like silver, the implication is clear: the Federal Reserve has little reason to ease policy anytime soon. Fed official Jeffrey Schmid has already stressed the need for patience.

The dollar strengthened on the news, while the yield on the 10-year Treasury note climbed to 4.53 percent — both headwinds for precious metals. Market pricing now assigns a higher probability to a rate move in December, further diminishing the near-term appeal of silver.

Beyond the interest-rate channel, the industrial demand picture is showing cracks. The Silver Institute projects a sixth consecutive annual supply deficit in 2026, with total supply easing to roughly 33,100 tonnes. But that structural shortfall is being offset by a notable slowdown in the photovoltaic sector, where silver demand is forecast to drop from 5,804 to 4,698 tonnes as cost-saving measures and material substitutions take hold. Robust investment buying will need to fill that gap, but the current macro environment is hardly encouraging for fresh inflows.

Technically, silver has lost nearly 40 percent from its 52-week high of $121.78. The relative strength index sits at 44 — not oversold, but also not signaling a bounce. For the coming week, traders are watching the $71–$72 resistance zone, with the 50-day moving average at $76.17 and $78 above that. On the downside, support sits at $66 and $65, with a break below opening the door to $61 and $60. Given the elevated speculative long positioning and the fresh macro headwinds, further position squaring could extend the downturn if those lower levels fail to hold.