Silver (XAG/USD) traded near $80.70 on Friday, up 2.98% on the day. It was supported by a weaker US Dollar and demand for safe-haven assets during geopolitical tension.
US Nonfarm Payrolls rose by 115K in April, above the 62K forecast. March payrolls were revised to 185K from 178K.
Labor Data And Dollar Reaction
The Unemployment Rate held at 4.3%. Annual wage growth rose to 3.6%, below the 3.8% expectation.
The US Dollar weakened despite the labour data. Markets focused on reports of a possible Washington–Tehran agreement and improved risk sentiment in equity markets.
Attention stayed on the Middle East after reports of new strikes near the Strait of Hormuz. US and Iranian media reported explosions and exchanges of fire, raising concern about wider escalation.
These conditions supported precious metals. Silver also gained support because a weaker Dollar can make USD-priced commodities cheaper for overseas buyers.
2025 Versus 2026 Market Regime
Looking back to this time in 2025, we saw silver prices surge past $80 an ounce. This was driven almost entirely by fears of a wider conflict in the Middle East, causing markets to ignore a strong US labor report. The focus then was on geopolitical risk, which created a powerful safe-haven bid and a strangely weak US Dollar.
The situation today is quite different, as those geopolitical tensions have significantly eased following months of diplomatic talks. Silver is now trading around $58, reflecting the removal of that conflict-driven premium from the market. We’ve seen a return to fundamentals, where economic data, not headlines about military strikes, dictates the direction of the US Dollar.
Unlike last year, the market is now highly sensitive to economic indicators, with the US Dollar Index (DXY) strengthening to 108.5 on the back of recent data. First quarter 2026 inflation proved sticky, coming in at an annualized 3.1%, which has supported the Federal Reserve’s hawkish stance. This stronger dollar is creating significant headwinds for precious metals, a direct reversal of the environment we observed in 2025.
For derivative traders, this means implied volatility has collapsed from the highs seen during the Hormuz crisis. Options pricing from that period in 2025 shows volatility was near multi-year highs, making buying puts or calls extremely expensive. Traders should now consider strategies that benefit from lower volatility, such as selling covered calls against physical holdings or entering credit spreads to collect premium.
In the coming weeks, we will be watching the upcoming April 2026 Nonfarm Payrolls report very closely. While last year’s strong jobs numbers were overlooked, a similar beat this year would likely send the dollar higher and put further downward pressure on silver. Any position should be hedged against the possibility of stronger-than-expected economic performance, as the market’s reaction function has completely changed.
