Silver Price Rallies To Six-Week High Ahead US Jobs Data

• Silver climbs to around $64.10, up 4.16% on Friday, reaching a fresh six-week high.

• Fading expectations of further Fed rate hikes continue to support precious metals ahead of the US jobs report.

• Geopolitical tensions in the Middle East are also underpinning safe-haven demand as investors await the NFP report.

Silver (XAG/USD) extends its strong rally on Friday, trading around $64.10 at the time of writing, up 4.16% on the day. The white metal reaches a fresh six-week high and is on track for its best weekly performance since February, supported by fading expectations of further interest rate hikes from the Federal Reserve (Fed) and persistent demand for safe-haven assets.

Markets, however, remain cautious ahead of the release of the United States (US) Nonfarm Payrolls (NFP) report later in the day. Economists expect the US economy to have added 80K jobs in July after 57K in June, while the Unemployment Rate is forecast to remain unchanged at 4.2% and annual Average Hourly Earnings growth is expected to hold at 3.5%. The data could reshape expectations for the Fed's monetary policy path.

According to the CME FedWatch Tool, investors have scaled back expectations for additional monetary tightening in recent days, a factor that continues to support precious metals, which typically perform well when interest rate expectations ease.

Meanwhile, geopolitical developments continue to support demand for safe-haven assets. Tensions in the Middle East remain elevated following reports of potential escalation involving Iran, the Houthis and Saudi Arabia, as well as renewed uncertainty surrounding the Strait of Hormuz.

Against this backdrop, the US employment report is expected to be the main short-term catalyst for Silver. A stronger-than-expected report could revive expectations of a more hawkish Fed and limit the metal's upside, while weaker data could weaken those expectations, providing additional support for XAG/USD.