Silver price (XAG/USD) continues to navigate a downward trend, currently trading near $29.1615 with an intraday low of $29.0365.

The recent decline was triggered by positive U.S. Nonfarm Payrolls data, which reinforced expectations that the Federal Reserve might sustain elevated interest rates longer than previously anticipated.

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Non farm Payrolls awaited for more rate-cut cues

Markets are now focused squarely on key U.S. Nonfarm Payrolls data for December, due later in the day.

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This optimism in the U.S. labour market bolstered the U.S. dollar, contributing significantly to the dip in silver prices.

Geopolitical Tensions and European Uncertainty Soften Silver’s Fall:

Despite the pressure from a stronger dollar, ongoing political uncertainties in Europe and geopolitical risks might buffer the fall in silver prices.

Market participants remain wary, avoiding significant commitments until the release of the latest U.S. consumer inflation figures and the Federal Open Market Committee (FOMC) decision on Wednesday, which could indicate the Fed’s rate cut timeline.

Dollar Strength and Rate Expectations Impact Silver:

The robust U.S. dollar, following the upbeat jobs report, has reduced the likelihood of an early interest rate cut. With the Fed potentially delaying cuts, expectations have adjusted to anticipate possibly just one rate reduction towards the end of the year.

This scenario has elevated U.S. Treasury yields, supporting the dollar and consequently, dampening silver’s allure.

Silver (XAG/USD) Price Forecast:

In technical terms, silver is at a crucial point. Currently priced at $29.228, it has seen a 1.67% drop. The pivot point at $29.06 is key; a sustained move below this could trigger further declines with support levels at $28.51, $27.98, and $27.37 on watch.

Conversely, resistance levels at $29.79, $30.54, and $31.51 could convert the bearish trend to bullish if breached. With the Relative Strength Index (RSI) at 38 and the 50-day EMA at $30.16 suggesting bearish momentum, traders are advised to monitor these technical indicators closely.

These developments in the U.S. economic landscape and silver’s technical responses offer investors insight into potential future price movements, emphasizing the importance of staying updated with macroeconomic indicators and market sentiment.