Silver Drops to $49.60—Can Soft PMI Data Spark a Bullish Reversal?
Silver is trading around $49.60 in early European trade, drifting lower after a mixed batch of U.S. economic releases kept the dollar...
Quick overview
- Silver is trading around $49.60, drifting lower due to mixed U.S. economic data that supports the dollar.
- Unexpectedly strong labor figures, including a drop in unemployment claims, have reduced the urgency for Federal Reserve rate cuts.
- The upcoming Flash PMI readings will be crucial in shaping market expectations for future Fed policy and Silver's price direction.
- Silver's technical outlook shows a bearish trend, with a potential target of $47.99 if it closes below $49.06.
Silver is trading around $49.60 in early European trade, drifting lower after a mixed batch of U.S. economic releases kept the dollar supported. Thursday’s labor figures illustrated unexpected resilience, pushing investors toward the greenback and squeezing precious metals lower.
Unemployment Claims fell to 220K versus the forecast 232K, signaling that job losses remain contained despite slowing hiring. Non-Farm Employment Change surprised at 19K, flipping last month’s contraction and offsetting softer wage growth. The unemployment rate held steady at 4.4%, matching expectations.
This combination strengthened the U.S. dollar and limited Silver’s upside, as resilient labor data reduces urgency for near-term Federal Reserve rate cuts.
PMI Data in Focus Today
Markets now turn to Friday’s Flash PMI readings, which will help refine expectations around December and January Fed policy moves.
Forecasts point to:
- Flash Manufacturing PMI: 52.0 (prev. 52.5)
- Flash Services PMI: 54.6 (prev. 54.8)
A weaker-than-expected print could revive hopes of a dovish shift and offer Silver some breathing room. Stronger PMIs, however, risk reinforcing dollar strength and dragging XAG/USD back toward the $49.00 support region.
[[XAG/USD-graph]]
Silver (XAG/USD) Technical Outlook: Trendline Break Signals Shift in Momentum
Silver’s short-term structure has turned heavier after price slipped below the rising trendline that supported all of November’s climb. The break came on a clean bearish candle, followed by a sequence of lower highs and lower lows — the first signs of a developing downtrend.
The rejection from $50.70–$50.45 acted as a clear supply zone, producing a three-candle reversal that resembles a three black crows pattern. Price is now pressing into the $49.60 pivot, with the 20-EMA rolling over and holding above price, showing sellers remain firmly in control.
Momentum confirms the shift. The RSI has dropped into the low-30s without bullish divergence — a signal that any bounce may be shallow unless fresh catalysts appear. A decisive close below $49.06 opens the door toward $47.99, and potentially $47.03 if momentum accelerates.
Silver (XAG/USD) Trade Setup: Wait for Clear Confirmation
For newer traders, the cleanest approach is patience. A bearish continuation trade activates if Silver closes below $49.06 on strong volume, targeting $47.99 with extension to $47.03.
A bullish alternative only emerges if price prints a strong reversal candle — such as a hammer or bullish engulfing — and reclaims the 20-EMA, creating room back toward $50.45–$50.70.
Until then, the bias leans toward sellers.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save