- Silver prices rebounded sharply to trade at $23.17, supported by a softer US jobs report.
- October Nonfarm Payrolls and cooling wage growth suggest a less aggressive Fed and strengthen XAG/USD.
- The decline in US Treasury yields further increases the attractiveness of silver as a non-yielding asset.
silver prices rebounded from daily lows at $22.59 and climbed more than 1.89% after the US Department of Labor (DoL) revealed that the US economy added fewer workers to the labor force than expected. Traders are therefore pricing in the Federal Reserve (Fed) not to raise rates further, which would dampen appetite for the US dollar (USD). At the time of writing this article XAU/USD is trading at $23.17, representing a gain of 1.86%.
Silver prices rise as weaker-than-expected US jobs data dampens expectations of Fed rate hike
US stocks remain in the green and show positive developments market sentiment. October’s Nonfarm Payrolls report featured fewer people joining the labor force than expected, while the unemployment rate edged closer to 4%. Average hourly earnings slowed from 4.3% in September to 4.1% last month, suggesting the labor market is cooling.
The data comes after the Federal Reserve left rates unchanged, although policymakers emphasized the need for a looser labor market, below-trend growth and a slowdown in inflation. Meanwhile, the chairman of the Fed Jerome Powell The hawkish comments were largely ignored as traders began cutting rates by nearly 100 basis points towards the end of 2024.
As a result, the decline in US Treasury yields is supporting the gray metal’s appeal. The benchmark US 10-year bond rate is at 4.55%, down 10 basis points (bps) on Friday, down 17 bps on the week so far, a tailwind for XAG/USD.
In the next week, American Economic Calendar is light, with the University of Michigan’s Balance of Trader, jobless claims and consumer sentiment releases. When it comes to economic data, however, Fed spokesmen would overstate the news
XAG/USD Price Analysis: Technical Outlook
The daily XAG/USD chart saw the bearish metal drop to the 20-day moving average (DMA) at $22.72 before retracing above $23.00 as buyers target the 200-DMA at $23.27. Violation of the latter would expose the upper part Bollinger bands to $23.63 before challenging $24.00. To resume the decline, sellers must drag prices below the lowest cyclical low of $22.44, the October 26 low.