Week Ahead: Not every glitter is gold…

• Silver ↑ 40% since start of 2025
• 83% correlation with gold over past 2 years
• Supported by industrial demand, ETFs and weaker USD
• Over past year US NFP triggered moves of ↑ 1.5% & ↓ 2.0%
• Bloomberg FX model – 70% – ($100.22 – $131.27)

Precious metals are taking a beating as the dollar strengthens on reports that Trump may nominate Kevin Warsh for Federal Reserve chair.

Nevertheless, Silver remains the champion in the commodity space, gaining 400% year-to-date versus golds 17% return.

Note: Although gold/silver crashed yesterday, most losses have been clawed back with bulls greedily eyeing fresh records.

Precious metals have been boosted by geopolitical risk, speculative demand from Chinese investors, ETF inflows and a broadly weaker dollar.

But silver is also drawing strength from rising industrial demand in the face of supply deficits.

These solid fundamental forces point to further gains for silver which has moved in tandem with gold 83% of the time in any given 5-day period over the past 2 years.

Before we cover themes that could impact silver, here is a list of events for the week ahead:

Sunday, 1st February

• OIL: OPEC+ ministers meeting

Monday, 2nd February

• CNY: China RatingDog Manufacturing PMI (Jan)
• EUR: Germany Retail Sales (Dec)
• GBP: UK S&P Global manufacturing PMI, Nationwide house prices
• USD: US ISM Manufacturing PMI (Jan); ISM Manufacturing Employment (Jan)

Tuesday, 3rd February

• AUD: RBA Interest Rate Decision
• FRA40: France Inflation Rate (Jan)
• MXN: Mexico Business Confidence (Jan)
• USD: JOLTs Job Openings (Dec)
• WTI/Brent: US API Crude Oil Stock Change (w/e Jan 30)

Wednesday, 4th February

• CNY: China RatingDog Services PMI (Jan)
• EUR: Eurozone Inflation Rate (Jan)
• USD: US ISM Services PMI (Jan); ADP Employment Change (Jan)
• WTI/Brent: US EIA Crude Oil Stocks Change (w/e Jan 30); EIA Gasoline Stocks Change (w/e Jan 30)
• NAS100: Alphabet earnings, US Treasury quarterly refunding announcement

Thursday, 5th February

• AUD: Balance of Trade (Dec)
• GBP: BoE Interest Rate Decision; MPC Meeting Minutes; UK S&P Global Construction PMI (Jan)
• EUR: ECB Interest Rate Decision
• MXN: BoM Interest Rate Decision
• US500: Amazon earnings

Friday, 6th February

• EUR: Germany Balance of Trade (Dec); Germany Industrial Production (Dec); France Balance of Trade (Dec)
• CAD: Canada Unemployment Rate (Jan); Canada Ivey PMI s.a. (Jan)
• USD: US Non-Farm Payrolls (Jan); Unemployment Rate (Jan); Michigan Consumer Sentiment (Feb)

There are a couple of high-level themes that may shape the outlook for Silver as we enter February:

Note: President Donald Trump will announce his nominee for Federal Chair on Friday 30^th January.

According to Polymarket, there is an 83% chance that he will pick former Fed governor Kevin Warsh which is a long-term critic of ultra-loose monetary policy.

So, this raises questions about whether he will yield to Trump and cut rates or reassert policy discipline.

1) Geopolitical risk

In the latest developments, Trump has threatened to attack Iran while saying he will impose tariffs on countries that supply oil to Cuba. He has also threatened to decertify all aircrafts made in Canada and threatened 50% tariffs on those planes.

Mounting geopolitical tensions may accelerate the flight to safety, boosting safe-haven assets like Silver.

2) US January NFP report

The incoming NFP report could shape the metals outlook for February.

What are the market forecasts for the January NFP report?

• 78,000 jobs added in January (higher than the 50,000 added in December)
• Unemployment rate to remain unchanged at 4.4%
• Average hourly earnings to slip to 0.3% month-on-month
• Average hourly earnings to slip 3.6% year-on-year (3.8% in January)

Traders are currently pricing a 15% probability of a 25bp Fed cut by March with this jumping to only 30% by April.

• Silver prices could push higher if a soft NFP report weakens the dollar and supports the case for lower US rates.
• A stronger-than-expected jobs report could weaken silver, especially if this results in a stronger dollar and reduced expectations over lower US rates.

3) Technical forces

Silver is aggressively bullish on the daily charts prices above the 21, 50, 100 and 200-day SMA.

However, the Relative Strength Index (RSI) is well above 70 – indicating that prices are extremely overbought.

• A solid breakout above $121.664 may open doors to fresh all-time highs at $125 and $131.27 – the upper bound of the Bloomberg FX model.
• Sustained weakness below $112.50 may encourage a decline toward $106.72 and $100.