- Silver price jumps near $31.00 as US yields fall following weak US NFP report
- Payrolls data beat estimates but remained below May’s reading.
- Silver price strengthens after a breakout of the descending channel.
Silver (XAG/USD) price hits a fresh three-week high near $31.00 in the American session on Friday. The white metal strengthens as US bond yields weaken after the US Non-Farm Payrolls (NFP) report for June showed that the labor market lost momentum.
The unemployment rate rose to 4.1% from estimates and the previous release of 4.0%. The number of people hired by employers was higher at 206,000 versus estimates of 190,000, but lower than the previous release of 218,000, revised down from 272,000.
In addition, average hourly earnings declined as expected in June. On a monthly and annual basis, average hourly earnings grew at a slower pace of 0.3% and 3.9%, respectively.
Soft wage data, downwardly revised payrolls and a further rise in the unemployment rate suggest that the strength in labor market conditions has weakened further. This would raise expectations of early rate cuts by the Federal Reserve (Fed). Currently, market participants expect the Fed to start cutting interest rates as early as September.
U.S. 10-year Treasury bond yields fall to around 4.3%. A drop in yields on interest-bearing assets reduces the opportunity cost of holding an investment in non-yielding assets, such as silver.
The Dollar Index (DXY), which tracks the value of the greenback against six major currencies, remains on a bearish path around 105.00.
Technical analysis of silver
Silver price strengthens after a breakout of the descending channel formation on a four-hour time frame. An upside breakout of the mentioned chart pattern results in a bullish reversal. A bullish crossover, represented by the 20-day and 50-day exponential moving averages (EMAs) at $29.30, exhibits an uptrend.
The 14-period RSI is moving into the bullish range of 60.00-80.00, indicating that momentum has shifted to the upside.
Silver four-hour chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
