Silver( around $58 is in a box range... Searching for direction before the FOMC

As signals of the Federal Reserve’s shift in monetary policy become more pronounced, the appeal of silver, an interest-free asset, is gaining attention. The international silver price(XAG/USD) continues to fluctuate within a narrow range around $58 per ounce. On Tuesday, during the Asian spot market hours, silver showed no clear signs of upward or downward movement, remaining in a wait-and-see stance.

Strengthening signals of rate cuts… Focus on dollar weakening trend

Market attention is centered on the December Federal Open Market Committee(FOMC) meeting. According to the CME FedWatch Tool, the futures market assesses an 89.4% probability that the Fed will cut the benchmark interest rate by 25bp(0.25%) at this month’s meeting, lowering it to the 3.50–3.75% range. The expectation of a rate cut has become virtually certain.

For silver, which has no interest income, a rate cut reduces opportunity costs, thereby increasing its relative investment value. Especially when considering the influx of safe-haven funds passing through offshore financial centers as individual investors seek diversification, demand for silver is expected to expand.

Labor market signals are the ‘game changer’… JOLTS data in focus

The key to determining the short-term direction of silver prices is the U.S. employment situation. The October JOLTS(Job Openings and Labor Turnover Survey) to be released at 3 p.m. GMT on Tuesday is expected to be a significant variable. Market forecasts suggest that the number of new job openings in the U.S. could reach approximately 7.2 million.

Scenario where job openings fall short of expectations: A clear slowdown in labor demand could reinforce the Fed’s case for additional rate cuts. This, coupled with dollar weakness, could exert upward pressure on silver prices.

Scenario where job openings exceed expectations: A resilient labor market might revive concerns over continued monetary tightening by the Fed. In this case, the upward momentum for silver could be limited.

$58 is the current ‘balance point’… Expectation of continued stalemate while waiting for next week’s variables

Recent speeches by New York Fed President John Williams indicated signs of slowing U.S. economic growth and a gradual weakening of labor demand. Such dovish comments have stimulated market expectations for rate cuts.

Currently, the silver market is expected to remain in a waiting phase near the technical support level of $58, ahead of the FOMC results and JOLTS data. Investors are maintaining a cautious stance, refraining from aggressive position building until clear signals emerge.