Is the worst over for silver? The answer may lie in the upcoming US NFP and CPI reports

The US NFP and CPI reports this week could decide the fate of precious metals. The volatility in the silver market is expected to increase substantially. What could be the possible outcomes?

Silver has been in consolidation mode ever since the big crash as the lack of key catalysts kept traders on edge. Much like for gold, the fundamentals are still against rising prices due to improving US data and easing geopolitical tensions. Silver has a high correlation with gold but it’s more volatile being a much smaller market.

This Wednesday could be pivotal for silver as we will get the US NFP report. In fact, the market is pricing 54 bps of easing for the Fed this year, so there’s a high risk of a hawkish repricing in case the data comes out strong. In such a scenario, we will likely see another selloff in silver.

On the other hand, a weak report should strengthen the case for more Fed easing and might even see traders bringing forward rate cut bets as some Fed members expressed scepticism about labour market stabilisation. In that case, silver will likely find a tailwind to rally into new highs.