Silver prices jumped to above one and half percent on Thursday, paring recent declines as weak manufacturing data and U.S. labor markets prompted the Federal Reserve to cut rates interest to prevent recession.
Earlier in the morning, US jobs data was widely read, although they confirmed that the labor market is cooling and added to the expectation of a 50-basis point (bps) increase. the Federal Reserve (Federal Reserve) has cut it in half. The Department granted an extension. Weeks, on the other hand, the economy remains strong as business activity in the service sector will improve against forecasts of a slowdown.
US Treasury yields fell after the data with the 10-year Treasury note down three basis points to 3.727%, undermining the buck. The US Dollar Index (DXY), a measure of the Greenback’s value against the other six currencies, tumbles over 0.21% to 101.05.
However, prospects of a US recession dampen the demand outlook for materials including silver, prompting traders to rush for safer assets like the dollar, yen and government bonds.
Silver has been a major beneficiary of the global push towards renewable energy, particularly from the solar industry, which relies heavily on the metal for photovoltaic cells.
However, global economic uncertainties and growth concerns in top consumer China have been weighing on the outlook for the renewable energy sector.
August’s NFP figures are expected to rise from 114K to 163K, while the Unemployment Rate could dip, according to the consensus, from 4.3% to 4.2%, later today. This could have an significant impact on the prices.
Technical Outlook of Silver Prices
Silver prices witnessed over 1.5% intraday gain yesterday. Prices jumped to the high 85945 and settled at 84956, as compared to the previous day’s close of 83540.
In the chart above, prices form a bullish consolidation, where a higher structure is formed. Also, the RSI movement indicators and 9 SMA are moving in the comfort zone.
Hence, it expected that, prices are expect to show positive momentum in a near future. However, it would need to cross above the 86220 in order to test 87800-8850.00
Else, on the downside, crucial support is seen at 83750 below it prices is expect to retreat towards 82380-80800.
Happy trading!
Commodity Samachar Securities
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