Key Takeaways:
- Silver price jumps near $29.00 as weak private sector employment data weighs on the US Dollar and bond yields.
- Investors expect a bigger interest rate cut from the Fed this month due to deteriorating labor market conditions.
- The US NFP data for August and ISM Services PMI data will be closely watched by investors.
Silver Price Surge due to Weak Employment Data
Silver price (XAG/USD) surged towards $29.00 in Thursday’s North American session as the US ADP Employment Change data for August came in weaker than expected. This led to renewed concerns about the labor market conditions, prompting speculation that the Fed will aggressively start the policy-easing cycle this month. The US Dollar (USD) and bond yields were negatively impacted by signs of slowing labor market demand.
Market Speculation and Decline in Dollar Index
The US Dollar Index (DXY) fell to around 101.00 as 10-year US Treasury yields dropped to approximately 3.73%. Lower yields on interest-bearing assets increased the appeal of non-yielding assets like Silver, as they reduced the opportunity cost of holding such investments.
Upcoming Data Releases
Investors will closely monitor the US Nonfarm Payrolls (NFP) data for August and the US ISM Services PMI data set to be released on Friday. The data releases are expected to further impact market sentiment and Silver prices.
Silver Technical Analysis
Silver is currently trading in a Channel formation on a daily timeframe with a slight downward slope. The asset is attempting to break above the 20-day Exponential Moving Average (EMA) around $28.80. The 14-day Relative Strength Index (RSI) suggests a consolidation ahead.
Silver FAQs
Silver is a precious metal that is highly traded among investors. It is used as a store of value, a medium of exchange, and as a potential hedge during high-inflation periods. Factors that affect Silver prices include geopolitical instability, recession fears, interest rates, and the behavior of the US Dollar (USD). Silver is also widely used in industries such as electronics and solar energy due to its high electric conductivity. The relationship between Gold and Silver prices is significant, with Silver typically following Gold’s movements.