Silver Price Forecast: XAG/USD edges higher but remains on backfoot with US NFP in focus


  • Silver price remains on edge as traders brace for the US NFP data for October.
  • Lower US Initial Jobless Claims data signaled an improvement in job demand.
  • The US Dollar resumes its upside journey after a corrective move.

Silver price (XAG/USD) adds little gains in European trading hours on Friday after plunging to near $32.50 on Thursday. The white metal faced sharp selling pressure after the release of the United States (US) Initial Jobless Claims data for the week ending October 25, which came in lowest in almost 22 weeks.

The US Department of Labor showed that individuals claiming jobless benefits for the first time were 216K, lower than estimates of 230K and the former reading of 228K. A slowdown in the jobless claims’ growth pointed to an improving labor demand environment. On Wednesday, the ADP Employment Change data also showed a strong labor requirement in the private sector. The agency reported that 233K workers were hired by the private sector in October, significantly higher than 159K in September.

Meanwhile, the US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, rebounds strongly to 104.10 after a corrective move to 103.80. 10-year US Treasury yields climb to near 4.30%.

For more interest rate cues, investors await the US Nonfarm Payrolls (NFP) data for October, which will be published at 12:30 GMT. The NFP report is expected to show that the economy added 113K new workers, significantly less than 254K in September. Economists expect the Unemployment Rate to have remained steady at 4.1%. The NFP data will significantly influence market expectations for the Federal Reserve (Fed) interest rate cut path.

Silver technical analysis

Silver price extends its correction to near the key horizontal support plotted from the May 20 high of $32.50 on a daily timeframe. The white metal finds a temporary cushion near the 20-day Exponential Moving Average (EMA), which trades at around $32.80.

The 14-day Relative Strength Index (RSI) falls inside the 40.00-60.00 range, suggesting that a bullish momentum is over for now, however, the bullish trend remains intact.

Silver daily chart

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.

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD trades at yearly lows below 1.0500 ahead of PMI data

EUR/USD trades at yearly lows below 1.0500 ahead of PMI data

EUR/USD stays on the back foot and trades at its lowest level since October 2023 below 1.0500 early Friday, pressured by persistent USD strength. Investors await Manufacturing and Services PMI surveys from the Eurozone, Germany and the US.

EUR/USD News
GBP/USD falls to six-month lows below 1.2600, eyes on key data releases

GBP/USD falls to six-month lows below 1.2600, eyes on key data releases

GBP/USD extends its losses for the third successive session and trades at a fresh fix-month low below 1.2600. This downside is attributed to the stronger US Dollar (USD) as traders continue to evaluate the Fed's policy outlook following latest data releases and Fedspeak.

GBP/USD News
Gold rises toward $2,700, hits two-week top

Gold rises toward $2,700, hits two-week top

Gold continues to attract haven flows for the fifth consecutive day and rises toward $2,700. XAU/USD continues to benefit from risk-aversion amid intensifying Russia-Ukraine conflict. Investors keep a close eye on geopolitics while waiting for PMI data releases. 

Gold News
Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally

Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally

Ethereum (ETH) is trading near $3,350, experiencing an 10% increase on Thursday. This price surge is attributed to strong bullish sentiment among derivatives traders, driving its open interest above $20 billion for the first time. 

Read more
A new horizon: The economic outlook in a new leadership and policy era

A new horizon: The economic outlook in a new leadership and policy era

The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures