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Silver Price Analysis: XAG/USD drops after jobless claims fall

  • XAG/USD continued its bearish path and fell to $23.75, below its 20-day SMA.
  • Initial US jobless claims for the first week of December were better than expected.
  • US bond yields are rising ahead of Friday’s key jobs reports.

In Thursday’s session, the price of Silver (XAG/USD) continued to decline and posted its third consecutive day of losses, falling to $23.75. The price of the precious metal is being pressured lower after US yields rose following the release of lower-than-expected US jobless claims. The performance was further boosted by the strength of the US Dollar (USD).

In line with this, the US Department of Labor showed that initial jobless claims for the week ending December 2 stood at 220,000, compared to the expected 222,000, and still accelerated from the 218,000 previous.

Following this data, US bond yields rose as strong labor market data favors a more hawkish Fed. The 2-year Treasury yield is at 4.60%, while the 5- and 10-year yields are at 4.15%. Rising rates put further pressure on unprofitable metals, as US Treasury yields are often considered their opportunity cost of holding.

That said, the U.S. Bureau of Labor Statistics is scheduled to report Friday on average hourly earnings, the unemployment rate and Nonfarm Payrolls. These reports will shape the expectations of the next decisions of the Federal Reserve (Fed), which follows them closely. It’s worth noting that officials noted they need to see more evidence of the economy cooling, so the outcome of the data may shape the pair’s near-term trajectory.

At the moment, markets are predicting that Non-Farm Payrolls have accelerated in November, while wages have slowed and the unemployment rate remains stable at 3.9%.

XAG/USD levels to watch

The technical indicators on the daily chart reflect a neutral outlook. Despite a negative slope in the Relative Strength Index (RSI) indicating growing selling momentum, it remains in positive territory, suggesting buying pressure still exists. However, the rising red bars on the moving average convergence divergence (MACD) histogram indicate that the bears are gaining momentum, contributing to a somewhat mixed picture.

Looking at the simple moving averages (SMA), the price is below the 20-day SMA, showing a short-term bearish bias. However, positioning above the 100- and 200-day SMAs shows that the bulls have the upper hand on the broader time frame.

Support Levels: $23.50, $23.30, $23.00.
Resistance Levels: $24.00, $24.30, $24.50.

XAG/USD daily chart


Latest price today 23.78
Today Daily variation -0.16
Today’s daily variation -0.67
Today’s daily opening 23.94
daily SMA20 23.9
daily SMA50 23.03
SMA100 daily 23.28
SMA200 daily 23.47
Previous daily high 24.36
Previous daily low 23.88
Previous weekly high 25.52
Previous weekly low 24.26
Previous Monthly High 25.27
Previous monthly low 21.88
Daily Fibonacci 38.2 24.06
Fibonacci 61.8% daily 24.18
Daily Pivot Point S1 23.75
Daily Pivot Point S2 23.57
Daily Pivot Point S3 23.27
Daily Pivot Point R1 24.24
Daily Pivot Point R2 24.54
Daily Pivot Point R3 24.73

Source: Fx Street

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