Silver at a key support levels. Will it break?

Silver faces a major pressure as labor market conditions in the US have improved significantly. American Auto Data Processing reported that private employers hired 164,000 workers in December, well above expectations of 115,000 and 103,000 previously. unemployment benefits have decreased significantly.

The US Labour Department reported that initial jobless claims for the week ended December 29 came in at 202,000, below the consensus of 216,000 and the previous estimate of 220,000.

Improving labour market conditions point to a solid economic outlook for the US economy, which may allow Federal Reserve (Fed) policymakers to support keeping interest rates higher for longer. Market participants expect the Fed to begin its “rate hike” in March. A delay in interest rate hikes could dampen overall market sentiment and affect demand for precious metals.

In addition, the US dollar index rebounded more than 1 percent to 102.726 from last week’s low of 100.6170, witnessing bullion pressure. The latest FOMC minutes showed that policymakers see interest rates rising by the end of 2024, but remain uncertain about the timing of monetary easing, which has supported sentiment.

Further, the US Non-Farm Payroll (NFP) report for December is likely to be released later today which will direct market momentum.

Technical Outlook

Silver has remained in the red since December 4, 2023. Prices are down more than 8% from yesterday’s high of 78549 to a low of 71627.00, but recovered slightly to settle at 72336. Compared to 72333 the previous day.

Intraday candlestick hammer candlestick, which is a sign of a recent trend reversal. Furthermore, silver prices bounced back above the key support at 71200, coincided with last month’s lows. Therefore, in the near future, prices may consolidate or recover in a short period of time, if it does not give a break below 71200.00. Silver prices may touch immediate resistance at 72950-73050 in near future which could attract selling pressures. on the upside, massive resistance is seen at 73580 above it prices will recover towards 73950-74450.

Alternatively, a break below 71200 will extend the decline to 70200-69500 ​​soon.

Therefore, traders should wait for a break of 71200 for another short trade as prices may consolidate, if it not break the crucial support.

Commodity Samachar
Learn and Trade with Ease

Also Read: German Inflation and US Unemployment – What Lies Beyond the Clash? , Will US Non-farm Payrolls Drive Market Sentiment to New Heights?

Recommended Read: Forex News letter: Market Rising High on FOMC minutes?

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