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Silver Price Analysis: XAG/USD Approaches $25 on Weak Labor Demand, USD Cracks Further

  • Silver price rises to near $25.00 as US contracting momentum slows due to higher interest rates from the Fed.
  • US ADP reported new private employment hires for August at 177,000, significantly lower than the July reading of 324,000.
  • Silver is approaching the horizontal resistance drawn from the July 20 high around $25.27.

The price of the Silver (XAG/USD) resumes its bullish path and looks set to recapture the psychological resistance at 25.00 in the early hours of the New York session. The white metal strengthens as the United States’ Automatic Data Processing (ADP) reported new private job additions for August at 177,000, significantly down from the July reading of 324,000. Investors expected 195,000 new private payrolls.

The Dollar Index (DXY) extends its decline to near 103.00 as weak demand for labor could allow the Federal Reserve (Fed) to keep interest rates stable throughout the year. Fed Chairman Jerome Powell told the Jackson Hole symposium that new policy actions will continue to be data driven. He further added that inflation is responding to the labor market.

US companies have slowed their hiring drive due to deteriorating demand. In addition, companies are underutilizing all their operational capacity, which reduces the demand for new payrolls. On Tuesday, the JOLTS job openings data also held in below expectations. Employers applied for 8.827 million open positions, compared to 9.165 million job offers in June.

Meanwhile, the S&P 500 Index is expected to open flatter, following signals from futures overnight. US 10-year Treasury yields fell further to around 4.10% as investors expect Fed interest rates to have peaked for now.

Silver Technical Analysis

Silver is approaching horizontal resistance drawn from the July 20 high around $25.27 on a two-hour scale. The upward slope of the 50-period EMA indicates that the upside momentum is extremely bullish.

The Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, indicating that bullish momentum is active.

2 hour chart

XAG/USD

Overview
Last price today 24.86
Today Change Daily 0.14
today’s daily variation 0.57
today’s daily opening 24.72
Trends
daily SMA20 23.31
daily SMA50 23.56
daily SMA100 23.97
daily SMA200 23.39
levels
previous daily high 24.8
previous daily low 24.18
Previous Weekly High 24.38
previous weekly low 22.67
Previous Monthly High 25.27
Previous monthly minimum 22.52
Fibonacci daily 38.2 24.56
Fibonacci 61.8% daily 24.41
Daily Pivot Point S1 24.33
Daily Pivot Point S2 23.94
Daily Pivot Point S3 23.71
Daily Pivot Point R1 24.95
Daily Pivot Point R2 25.18
Daily Pivot Point R3 25.57

Source: Fx Street

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