Silver price prediction: XAG/USD struggles to break $31.50 as traders await U.S. job reports
Fed rate cut hopes keep silver bullish amid macro uncertainty
Silver price has been on an uptrend this week, climbing from the psychological support at $30.00 to test the key resistance at $31.50. However, it has struggled to extend past this critical level, capping its gains despite a rally earlier in the week. This has left traders wondering whether a bullish trend can continue.
The upcoming US payrolls report will provide expectations for a potential Federal Reserve rate cut that could boost silver gains, or a strong jobs report that might signal a shift in favor of the US dollar, putting pressure on the metal.
Silver price dynamics (November-December 2024). Source: TradingView.
As we approach the end of the week, the price of silver stands near $31.30 after a brief dip to the 50% Fibonacci retracement level at $30.90, which was met with renewed buying interest at the 200-hour Exponential Moving Average (EMA). The Relative Strength Index (RSI) has climbed above 50, adding to the bullish momentum, but key challenges remain for silver bulls.
Upcoming US payroll report to shape silver price outlook
This week's price action coincides with growing macroeconomic uncertainty, particularly ahead of the US jobs report on Friday. While silver has largely decoupled from the US dollar and Treasury yields in recent weeks, the upcoming payrolls report has the potential to shift market expectations significantly. The market is currently pricing in a 70% chance of a 25 basis point rate cut by the Federal Reserve later this month. Even a slight uptick in the unemployment rate could provide a tailwind for silver, as traders seek safe-haven assets in a more dovish Fed environment.
However, if the payrolls data surprises to the upside with stronger-than-expected job growth and a drop in unemployment, the US dollar could see a rebound, and market expectations for higher interest rates could pressure silver lower. A stronger dollar combined with rising yields would make silver's non-yielding nature less attractive, potentially leading to downside risks for the metal.
Overall, while the immediate technical outlook for silver shows strong support near $30.00 and resistance at $31.50, the upcoming payrolls report is likely to play a pivotal role in determining whether silver can break through this resistance and maintain its bullish momentum.
Silver price has climbed 3% higher amid increased industrial demand. The outlook for silver remains positive, with the potential for further gains if certain resistance levels are broken.
