Silver Price Prediction – Prices Rebound on Stronger Hourly Earnings

Silver prices edged higher on Friday. The dollar was lower in the wake of the softer than expected U.S. nonfarm payroll report. U.S. Treasury yields moved higher across the curve with the 10-year yield hitting the highest level in 21-months. Hourly earnings moved higher than expected as the unemployment rate hit a pre-pandemic high.

Technical Analysis

On Friday, silver prices rebound despite higher yields. Support is seen near the December lows at 21.69. Resistance is seen near the 10-day moving average at $22.84. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are oversold as the fast stochastic is printing a reading of 19, below the oversold trigger level of 20. Medium-term momentum is about to turn negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

The Employment Rate Declines More than Expected

The U.S. Labor Department reported that the unemployment rate was a fresh pandemic-era low and near the 50-year low of 3.5% in February 2020. That decline came even though the labor force participation rate was unchanged at 61.9% amid an ongoing labor shortage in the U.S. Average hourly earnings rose more than expected as the U.S. sees its fastest inflation pace in nearly 40 years. Wages climbed 0.6% for the month and were up 4.7% year over year. That compares with respective estimates of 0.4% and 4.2%.