Silver Forecast: Traders Absorbing NFP Numbers While Straddling Pivot

Lower as Jobs Data Fuels Fed Rate Cut Speculation

Silver prices showed mixed movement on Friday following the release of the U.S. Non-Farm Payrolls (NFP) report, with traders eyeing key technical levels to determine the metal’s near-term trend. The market is straddling a crucial pivot point at $31.29, setting the stage for a potentially decisive move.

At 14:29 GMT, XAG/USD is trading $31.11, down $0.22 or -0.71%.

Silver’s Key Levels in Focus

A sustained move above $31.29 could attract fresh buying interest, but traders face resistance at the 50-day moving average of $31.70. A clear break above this level would indicate stronger bullish momentum, with the next targets ranging from $32.28 to $32.89.

Conversely, a failure to hold $31.29 could lead to a retreat toward a secondary pivot at $30.61. Breaching this support would expose silver to a test of its recent low at $29.64 and the critical 200-day moving average at $29.32, which could act as a floor for prices.

Treasury Yields Decline Post-Jobs Report

Treasury yields dipped as the NFP report bolstered expectations of a Federal Reserve rate cut at its December 17-18 meeting. The 10-year Treasury yield fell 4 basis points to 4.14%, while the 2-year yield declined 6 basis points to 4.08%.

Nonfarm payrolls increased by 227,000 in November, surpassing the consensus estimate of 214,000, while the unemployment rate edged higher to 4.2%. This rise, accompanied by a decline in labor force participation to 62.5%, fueled market speculation of further monetary easing. Traders now see an 88% probability of a 25-basis-point rate cut.

Fed’s Rate Outlook and Labor Market Trends

Despite stronger-than-expected payroll growth, Federal Reserve Chair Jerome Powell’s recent comments underscore a cautious approach to rate cuts. Powell highlighted improved economic conditions, noting the labor market’s resilience and easing downside risks.

“The good news is that we can afford to be a little more cautious as we try to find neutral,” Powell remarked earlier this week.

Market Forecast

Silver traders will remain focused on the $31.29 pivot as a key determinant of direction in the coming sessions. A bullish breakout above this level could signal continued strength, while a drop below risks deeper corrections toward $29.64. Fed rate decisions and further economic data releases will likely drive market sentiment as December progresses.

More Information in our Economic Calendar.