Biggest Dive in Gold and Silver Prices Since Covid in 2020

The Gold and Silver price was consolidating for 2 weeks before trying to resume the uptrend, which failed as they nosedived on Friday, after a decent US NFP (Non-Farm Payrolls) report, which calmed fears of a softening labour market in the US. That sent the Buck surging higher and everything else crashing lower, particularly Gold which lost $100 or around 4% of the value and Silver which lost $2.50, however, it accounted for a hefty 8% of the value.

Silver price closed at $28.08 last week

In May, GOLD (XAU/USD) and SILVER both reached impressive highs, with gold hitting a recent record of $2,450 and silver reaching $32.50. However, both precious metals experienced a significant reversal in their fortunes, with gold falling below $2,300 and silver dropping below $30 by the end of the month.

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Silver Chart Daily – XAG Tests the 20 SMAChart XAGUSD, D1, 2024.06.09 20:24 UTC, MetaQuotes Ltd., MetaTrader 5, Demo

Gold had been the standout performer in the first half of the year, attracting attention and setting records. In contrast, silver had been quietly outperforming gold since February, reaching an 11-year high in the previous month. However, despite these achievements, silver is still a long way from its all-time high of below $50.

Friday saw a notable downturn for both metals after the strong US NFP employment figures, wiping the week’s gains. By the close of trading on Friday, silver had dropped by $2.50 to around $29.08, while gold experienced a more substantial decline of $100, finishing the week at $2,292.

US Nonfarm Payrolls Report:

  • Strong Job Growth: May saw 272,000 jobs added, exceeding the 190,000 consensus.
  • Wage Growth: Average hourly earnings increased by 0.4% month-on-month, and 4.1% year-on-year, both above expectations.
  • Fed Policy Implications: Strong payroll and wage data suggest that the Federal Reserve might maintain a restrictive interest rate environment longer, which supports higher yields on interest-bearing assets and strengthens the US dollar.

Silver Technical Analysis

  • Bearish Outlook If the 50 SMA Breaks:

    • Lower Highs and Lower Lows: Both gold and silver have been making lower highs and lower lows since gold’s peak at $2,450.
    • Selling Pressure: Indicates a potential deeper correction lower.
    • Key Support Level: Currently testing the 50-day Exponential Moving Average (EMA) near $29.
    • Confirmation Needed: Sellers must break below the 50-day Simple Moving Average (SMA) on the daily chart for a decisive bearish reversal signal.

Silver Live Chart

SILVER
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Skerdian Meta
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Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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