Silver Price Forecast: XAG/USD attracts some buyers to near $41.00 as US NFP data looms

• Silver price drifts higher to around $40.85, up 0.45% on the day. 

• Expectations that the US Fed will cut interest rates later this month support the Silver price. 

• Traders brace for the US August Nonfarm Payrolls report later on Friday.

The Silver price (XAG/USD) attracts some buyers near $40.85 during the Asian trading hours on Friday, bolstered by the weaker US Dollar (USD). The white metal receives support from the prospect of the US Federal Reserve (Fed) rate cut this year. Traders await the release of the highly-anticipated US August Nonfarm Payrolls (NFP) report later on Friday for fresh impetus. 

Data released on Thursday showed that the US Initial Jobless Claims increased more than expected last week. Additionally, the ADP National Employment Report revealed that US private payrolls increased less than expected in August. 

These reports indicated softening labor market conditions, reinforcing the Fed rate reduction expectation. This, in turn, weighs on the US Dollar (USD) and lifts the USD-denominated commodity price.  Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding white metal. 

Additionally, geopolitical tensions might contribute to the white metal’s upside, as it is considered a safe-haven asset. The US is looking to pressure buyers of Russian crude to push Moscow into agreeing to a truce in Ukraine. US Treasury Secretary Bessent said on Tuesday that the US "will be examining sanctions on Russia very closely this week" due to the ongoing war in Ukraine.  

The US NFP report will be closely watched later on Friday. This reading could offer some hints about the US interest rate path. Economists forecast to see 75,000 job additions in August. In case of a stronger-than-expected outcome, this could boost the Greenback and drag the Silver price lower in the near term.