Silver Prices Slightly Lowered Amid Strong Jobs Data and Firmer Dollar

Key Insights

• Silver prices edged lower as yields and the dollar climbed
• The dollar rose while the Euro declined as Russia-Ukraine remains in focus
• A crucial part of the yield curve inverted following robust jobs data
• Oil prices whipsawed as EIA discusses deploying more oil reserves

Silver prices dipped but mainly traded flat as benchmark yields rose on Friday. The 2s-10s part of the yield curve, a critical part of the curve, is inverted following solid jobs data. Gold prices moved lower as yields, and the dollar strengthened. Oil prices dipped in volatile trading as members of the International Energy Agency (IEA) convened to discuss the release of more oil reserves and the US’ planned deployment of 180 mln barrels, or one mln barrels per day, over the next six months. This release is the largest ever from the US Strategic Petroleum Reserves (SPR). Despite the release of reserves, the oil supply will still be a challenge in the coming months.

A plethora of economic data was released on Friday morning. Nonfarm payrolls, which measure the number of workers in the US, grew by 431,000 in March. The reading was slightly under the estimate of 490,000 despite mounting inflation and the possibility of an economic downturn. The unemployment rate declined by 0.2% to 3.6%, below expectations of 3.7%. Average hourly earnings rose to 0.4%, in line with expectations. The reading is used to follow inflation closely. Today’s economic data had no significant surprises, signaling that the Fed will likely raise rates at the six remaining FOMC meetings this year.

Technical Analysis

Silver prices slid but recovered, consolidating near the 24.72-24.78 region as jobs data strengths the dollar and yields. The released jobs data points toward a more substantial labor market, signaling that the Fed will maintain its hawkish stance and move forward with six rate hikes. Additionally, progress in Russia-Ukraine peace talks signals downward price movement. Silver prices have a limited ability to climb. 

Resistance is near the 10-day moving average near 25.02. Support is seen near the 50-day moving average near 24.04. Short-term momentum turned negative as the fast stochastic had a crossover sell signal.

The medium-term momentum is negative as the histogram prints negatively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is in negative territory but decelerating, which reflects the upward trend in price movement.