Silver Price Analysis: XAG/USD falls to eight-week lows, worst week since October

• US dollar soars after NFPs.
• The US ISM shows more favorable data.
• Silver falls more than 3% on Friday; 8% from Thursday’s high.

Metals extend sell-off after official US jobs report. the silver it hits new monthly lows around $22.50 and lives its worst day in months.

Strong labor market, the service sector expands again

US economic data released on Friday beat expectations, reflecting strength in the labor market and improving activity in the service sector. The numbers boosted the dollar and Treasury yields. Wall Street moves without a clear direction.

Data released Friday by the US Bureau of Labor Statistics (BLS) showed Nonfarm Payrolls increased by 517,000 in January, significantly above market expectations of 185,000. The figures for November and December were revised upwards. The unemployment rate dropped unexpectedly to 3.4%.

Another more recent release revealed that economic activity in the services sector entered expansion territory in January, with the ISM Services PMI rising from 49.2 in December to 55.2, beating market expectations of 50.4. Additionally, the prices paid index dipped slightly from 68.1 to 67.8, above the consensus of 65.5.

Following the ISM data, silver hit a new low at $22.47, the lowest level since December 7. As the end of the week approaches, the XAG/USD pair tries to cut losses and trades at $22.65, down 3.40% on the day. Since Thursday’s high it has fallen 8%.

The technicals added pressure to XAG/USD and at the moment it suggests that further losses are likely. Price is breaking out of a consolidation range after being rejected again from above $24.00.

Interim support is around $22.50, and below is the strong barrier around $22.00. A recovery above $23.00 could ease the bearish pressure.

XAG/USD daily chart

technical levels