Silver Price Prediction – Prices Edge Lower Ahead of Employment Data

Silver prices are rangebound as traders wait for additional economic data before pulling the trigger on a direction. After moving higher last week, prices are consolidating. The Fed gave a dovish hold, and has shown they continue to be concerned with jobs data. At the end of the week the U.S. will release the employment report, which will help determine the backdrop of the current jobs situation. Ahead of that report, ADP will release private payroll data and the ISM will report its manufacturing report, which will describe the employment picture in the manufacturing space.

Technical analysis

Silver prices edged lower and continue to consolidate—resistance near the breakdown level at 24.42. Additional resistance is seen near the 200-day moving average at 25.85. Support is seen near the 10-day moving average at 23.75. Prices are overbought as the fast stochastic is printing a reading of 80, above the overbought trigger level of 80 and could foreshadow a correction.  The fast stochastic generated a crossover sell signal which reflects accelerating negative momentum. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This buy signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Private Payrolls Are Expected to Rise

Tomorrow, the ADP reports its private-sector job estimate.  The median expectation is for 625k after a 330k increase in July.  Ahead of the national ISM report, the Chicago Purchasing Managers Index was released by ISM-Chicago dropped to 66.8 in August from 73.4 in July, reflecting a decline in manufacturing activity across the heart of the mid-West. This reading came in lower than the market expectation of 68.