Silver Price Prediction – Prices Fail on Breakout Attempt


key ideas

  • Silver prices started to break out but encountered resistance.
  • Treasury yields rose.
  • The dollar rose weighing on gold prices.

Silver prices attempted to rally but ran into selling resistance. Gold prices fell, weighing on the entire precious metals complex. Stronger than expected employment data supported the greenback. Since precious metals are valued in dollars, a stronger greenback usually generates headwinds for silver.

Benchmark yields rose on stronger than expected employment data. The strong jobs report ran counter to ADP’s weaker-than-expected private payrolls report released Thursday.

Non-farm payrolls increased by 390,000 while the unemployment rate rose to 3.6%. Expectations were that the job market would grow by around 328,000 jobs. The unemployment rate was expected to fall further to 3.5%. The average hourly wage increased by 0.3%. Average hourly wages were expected to rise 0.4%. This scenario could be the sign of a moderation in wage inflation. The year-over-year wage increase was 5.2%.

Technical analysis

Silver prices attempted to rise but could not break out. Support is near the 10-day moving average of 21.99. Resistance is seen near the 50-day moving average at 23.26.

The 50-day moving average remains crossed below the 200-day moving average, which is a headwind for XAG/USD and indicates bearish momentum. Silver will likely head towards the 20.4 level.

The medium-term momentum turns positive when the histogram prints positively with the MACD (Moving Average Convergence Divergence). The trajectory of the MACD histogram is in negative territory, which reflects a downward trend in price movement.

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