Silver Price Forecast: XAG/USD jumps to near $37.30 as US bond yields slump

• Silver price advances to near $37.30 amid a sharp decline in US bond yields.

• US Treasury yields declined as traders raise bets supporting interest rate cuts by the Fed in the September meeting.

• The US NFP report showed that labor demand remained weak in July.

Silver price (XAG/USD) extends its Friday’s recovery move to near $37.30 on Monday. The white metal strengthens as United States (US) bond yields decline sharply, following the release of the softer-than-projected Nonfarm Payrolls (NFP) data for July.

During the press time, 10-year US Treasury yields trade slightly higher, but are still close to near to an almost three-month low around 4.20%.

Lower yields on interest-bearing assets result in an increase in demand for non-yielding assets, such as Silver.

The US NFP report showed on Friday that the economy added 73K fresh workers, missed estimates of 110K by a wide margin. Also, employment figures for June revised sharply lower to 14K from 147K. The Unemployment Rate rose to 4.2%, as expected, from the prior release of 4.1%.

Signs of cooling labor market conditions have led to a sharp acceleration in market expectations for interest rate cuts by the Federal Reserve (Fed) for the policy meeting in September.

According to the CME FedWatch tool, the probability of the Fed to cut interest rates in the September meeting has increased to 80.8% from 41.2% seen on Thursday, a day before the release of the NFP data.

Silver technical analysis

Silver price finds cushion after correcting to near the 50-day Exponential Moving Average (EMA) around $36.60.

The 14-day Relative Strength Index (RSI) oscillates below 50.00, suggesting that the momentum is on the downside.

Looking down, the June 24 low of $35.28 will act as key support for the major. On the upside, the June 30 high near $38.25 will be a critical hurdle for the pair.

Silver daily chart