Silver Rally Stalls, Investors Eye Employment Data

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Updated: Oct 3, 2019, 12:22 UTC

Silver has taken a breather on Thursday, in what has been a busy week for the metal. With the U.S. releasing key employment data before the end of the week, we could see some movement from silver.

Silver is flat in Thursday trade. In the European session, the metal is trading at $17.58, down $0.01, or 0.07% on the day.

Silver Recovers Losses After Soft Mfg. PMI

Silver continues to swing this week. After falling close to 3.0% on Monday, silver has rebounded and recovered these losses. The recovery started on Tuesday, as the ISM Manufacturing PMI fell to 47.8 in August, marking its sharpest contraction since the recession in 2009. The U.S. manufacturing sector, which started the year with strong expansion, has now contracted over two straight months. The news sent stock markets sharply lower, while at the same time boosting safe-haven assets such as gold and silver.

The woes of the U.S. manufacturing sector may have taken a toll on the labor market. On Wednesday, ADP nonfarm payrolls for August dropped sharply to 135 thousand, compared to 195 thousand a month earlier. Later on Thursday, the U.S. releases unemployment claims, which is expected to tick higher to 215 thousand, compared to 213 thousand last week. On Friday, we’ll get a look at the official nonfarm payroll report. Will it follow in the path of the ADP release and slow in August? We’ll also get a look at wage growth, which is expected to tick lower to 0.3%, after a reading of 0.4% in the previous release. If these key employment numbers are soft, nervous investors could snap up silver and send prices higher.

Silver Technical Analysis

Silver broke above resistance above 17.50 on Wednesday and is hovering just above this line on Thursday. This line could see further action during the day. Above, there is resistance at the round number of 18.00. On the downside, 16.90 was tested on Tuesday. This is followed by support at 16.10, which has held since the first week of August.

XAGUSD 4-Hour Chart

About the Author

Kenny Fisherauthor

Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.