Silver Prices Consolidate After Strong Gains in Payrolls

Silver prices consolidated on Friday in the wake of solid gains in nonfarm payroll data. Gold prices eased after the jobs data, as the US dollar climbed following a two-week low. US treasury yields rose following the larger-than-expected jobs gain. The ten-year yield rose above 1.9%, the highest level since 2019. 

Technical Analysis

On Friday, silver prices consolidated near a key support level. Support is seen near an upward sloping trendline near 22.55. Resistance is seen near the 50-day moving average at 22.84. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fast stochastic is printing a reading of 17.12, below the oversold trigger level. Prices are becoming less oversold. Medium-term momentum is negative as MACD (moving average convergence divergence) index crossover indicates a sell signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses over the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram prints in negative territory with a downward sloping trajectory. However, negative momentum is decelerating, which points toward higher prices.

Employment Participation Rate Grows

Nonfarm payrolls rose by 467,000 in January, beating economists’ estimates of 150,000. The stunning gain came after a surge in Omicron that the White House predicted would slow down job growth. The most significant employment gains came from leisure and hospitality, which gained 151,000 hires. 108,000 came from bars and restaurants. The labor force participation rate rose to 62.2%, a 0.3 percentage point gain. This reading is the highest since March 2020 and within 1.2 points of where it was pre-pandemic.