Silver Slides to $57.37 as $58.90 Rejection Sparks Pullback Ahead of Key U.S. Data
Silver (XAG/USD) is now sitting at $57.37, easing back a bit after bouncing off the $58.90 resistance zone - failing to hold on to recent...
Quick overview
- Silver (XAG/USD) is currently at $57.37 after failing to maintain gains above the $58.90 resistance level.
- Market expectations for a Federal Reserve rate cut have increased to 89%, but traders are cautious ahead of upcoming US economic data.
- The recent ADP employment report showed a surprising decline in private payrolls, indicating cooling labor conditions.
- Silver's technical outlook remains under pressure, with key support levels at $54.97, $53.76, and $52.55 if it fails to hold above $56.47.
Silver (XAG/USD) is now sitting at $57.37, easing back a bit after bouncing off the $58.90 resistance zone – failing to hold on to recent gains above that level. Expectations for a Federal Reserve rate cut are still building, but that’s giving traders a nervous feeling about what new US economic data might bring later today. The Initial Jobless Claims release is being viewed as a major wild card for short-term market volatility.
The ADP employment report from Wednesday gave us a surprise: US private payrolls actually fell by 32,000 in November, a sign that labour conditions are starting to cool off. The October numbers were revised slightly, but it didn’t make things look any better, and other indicators are still pointing to slowing demand. Meanwhile, the ISM Services PMI ticked up to 52.6, beating expectations, suggesting the economy is still basically stable, at a slower pace.
Fed Expectations Jump but Market Fizzles Out
Now markets are thinking there’s an 89% chance of a 25-bp rate cut next week at the FOMC meeting, up from 71% just a week ago. The Fed thinks that lower rates have forced down the value of the US Dollar and helped spare precious metals from a worse beating.
[[XAG/USD-graph]]
But even so, the upside momentum just isn’t there – traders are holding back until next Friday’s delayed PCE inflation report comes out, which could easily change the whole picture. If inflation is hotter than expected, that could kick the Dollar back into gear, and if it’s softer than expected, that makes the case for a rate cut even stronger.
Here are the key things traders are keeping an eye on:
- The next Jobless Claims release – we’ll be looking for fresh labour signals to see how the labour market is doing.
- How the Fed outlook shifts as we get closer to the FOMC meeting
- Dollar volatility – all this mixed US data is still causing market jitters
Silver (XAG/USD) Technical Outlook
Silver’s still under pressure after failing to keep its gains above the $56.47 Fibonacci level. It’s clear supply is still showing up – the candlestick rejections near $58.90 are a clear sign of that. And while the price is still holding above that rising trendline, it’s definitely lost some of its momentum.
Looking ahead, the next big support level is the 38.2% Fibonacci level at $54.97, followed by the deeper support zones at $53.76 (50% Fibonacci) and $52.55 (61.8% Fibonacci). The 20-day EMA at $58.06 is now sloping downwards, and the RSI at 43 suggests momentum is cooling off, but we’re not yet at oversold levels.
For silver to start looking good again, we need to see a close back above $58.06. If we can’t hold on to $56.47, then it’s likely we’ll start seeing a bigger drop down to those Fibonacci supports.
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