Silver prices (XAG/USD) reversed their decline on Wednesday (January 7th) after three sessions of surges. Silver fell around 2.5% to around US$79.27 per troy ounce in the latest trading session, marking a "cooling off" phase after briefly approaching record levels.

This decline was primarily driven by profit-taking. After a rapid rally in recent days, many market participants opted to lock in profits—especially ahead of a series of US economic data that typically triggers significant volatility in precious metals.

Additional pressure came from the strengthening US dollar. The dollar index (DXY) hovered around 98.64, making dollar-denominated assets like silver more expensive for buyers compared to other currencies, thus restraining demand.

Market focus is now on the US "data package," from ADP, ISM Services, and JOLTS, before the Non-Farm Payrolls (NFP) report peaks on Friday. This data will help determine whether the market becomes more confident that the Fed will cut interest rates sooner—which is usually a positive sign for silver—or whether it will temper those expectations.

Although geopolitical tensions remain high, the market has recently become more responsive to the direction of interest rates and the dollar. As long as the dollar remains firm and investors choose risk-on, silver could struggle to rebound quickly. However, if US data begins to show clear weakness, the likelihood of an interest rate cut could strengthen again, opening up room for silver to strengthen again. (Arl)

Source: Newsmaker.id