Silver Price Forecast: XAG/USD corrects further in countdown to US NFP data

來源 Fxstreet
  • Silver price retreats further to near $51.40 ahead of the US NFP data.
  • The US Dollar gains sharply with US NFP taking centre stage.
  • Fed’s Logan said last week that the labor market remains broadly balanced, if anything, slightly tight.

Silver price (XAG/USD) extends its correction from its weekly high of $53.45 to near $51.40 in the European trade on Friday. The white metal is under pressure as the US Dollar regains ground, with investors turning cautious ahead of the United States (US) Nonfarm Payrolls (NFP) data for October, which will be published at 13:30 GMT.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.36% higher to near 101.92.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.34% 0.31% 0.09% 0.32% 0.88% 0.68% -0.02%
EUR -0.34% -0.03% -0.25% -0.01% 0.54% 0.36% -0.36%
GBP -0.31% 0.03% -0.19% 0.01% 0.58% 0.39% -0.32%
JPY -0.09% 0.25% 0.19% 0.24% 0.79% 0.58% -0.11%
CAD -0.32% 0.00% -0.01% -0.24% 0.55% 0.34% -0.35%
AUD -0.88% -0.54% -0.58% -0.79% -0.55% -0.20% -0.89%
NZD -0.68% -0.36% -0.39% -0.58% -0.34% 0.20% -0.68%
CHF 0.02% 0.36% 0.32% 0.11% 0.35% 0.89% 0.68%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Technically, a higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.

What are estimates for US NFP and other key labor market data?

According to estimates, US employers hired 65K new workers, higher than 29K in September. The Unemployment Rate is seen as steady at 4.2%.

Average Hourly Earnings, a key measure of wage growth, is expected to have grown at a moderate pace of 2.9% Year-on-year (YoY) against 3% in September. On a monthly basis, the wage growth measure is seen rising 0.3% against the previous reading of 0.1%.

How will US NFP impact Fed’s monetary policy expectations?

The US NFP data is expected to have a limited impact on Federal Reserve’s (Fed) interest rate expectations as recent remarks from officials after the monetary policy decision in later October have indicated that the central bank will on the monetary tightening path amid upside inflation risks.

Dallas Fed Bank President Lorie Logan said last week that “at least two more quarter-point rate hikes” are needed, citing that it is “unacceptable” the inflation is not headed back to the 2% target. About employment market, Logan said, “Labor market is balanced, perhaps tightening a bit.”

Silver Technical Analysis

In the weekly chart, XAG/USD trades at $51.45, extending a bearish near-term bias as price holds below the 9-week Exponential Moving Average (EMA) at $56.85 and well under the 61.8% Fibonacci retracement at $59.35. The Relative Strength Index (14) at 36.47 hovers just above oversold territory, hinting that while downside momentum has eased slightly, sellers still retain control after the prolonged decline from the cycle highs.

On the topside, initial resistance is seen at the 9-week EMA around $56.85, followed by the 61.8% retracement at $59.35, with further barriers at the 50% retracement near $71.24 and the 38.2% level at $83.13 if a stronger rebound develops. On the downside, the 78.6% Fibonacci retracement at $42.41 offers the first meaningful support, ahead of the structural low around $20.84, which marks the 100% retracement of the broader decline.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Silver FAQs

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

免責聲明:僅供參考。 過去的表現並不預示未來的結果。
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