Silver Price Prediction – Prices Fail on Breakout Attempt

Key Insights

• Silver prices attending to break out but were met with resistance.
• Treasury yields rose. 
• The dollar moved higher weighing on gold prices.

Silver prices attempted to break out but were met with selling resistance. Gold prices fell weighing on the entire precious metal complex. Stronger than expected jobs data buoyed the greenback. Since precious metals are priced in dollars, a stronger greenback usually generates headwinds for silver.

Benchmark yields moved higher following the stronger than expected jobs data. The good jobs report was counter to the softer than expected ADP private payroll report released on Thursday.

Non-farm payrolls rose by 390K while the unemployment rate moved to 3.6%. Expectations were for the jobs market to expand by about 328K jobs. The unemployment rate was expected to decline further to 3.5%. Average hourly wages increased by 0.3%. Expectations were for average hourly wages to rise by 0.4%. This scenario might be a sign that wage inflation is moderating. The year-over-year increase in wages was 5.2%.

Technical Analysis

Silver prices attempted to move higher but were unable to break out. Support is seen near the 10-day moving average of 21.99. Resistance is seen near the 50-day moving average at 23.26.

The 50-day moving average remains crossed under the 200-day moving average, which is a headwind for XAG/USD and indicates downward momentum. Silver will likely head to the 20.4 level.

The medium-term momentum turns positive as the histogram prints positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is in negative territory, which reflects a downward trend in price movement.