Silver (XAG) Forecast: Jobless Claims Data Set to Influence Price Action

Silver Shines as Fed Rate Cut Hopes Intensify

Silver prices strengthened on Thursday, buoyed by a weakening dollar and falling Treasury yields. The shift comes as market participants increasingly bet on a potential U.S. interest rate cut cycle starting in September.

At 12:04 GMT, XAG/USD is trading $27.07, up $0.46 or +1.75%.

Bulls and Bears Battle at Key Technical Level

Spot silver rose, breaking a three-day losing streak, while U.S. silver futures also gained ground. The dollar index fell 0.1%, making silver more attractive to overseas buyers. Concurrently, the 10-year U.S. Treasury yield declined, further supporting precious metals.

Traders are closely watching the 200-day moving average at $26.08, which has been guiding the market higher since early March. A failure to maintain prices above this level could trigger a significant downturn. However, the shallow correction following Monday’s sell-off has provided investors with confidence to re-enter long positions.

Economic Headwinds vs. Monetary Tailwinds

Concerns about industrial demand from China and the U.S. due to signs of economic slowdown are limiting silver’s gains. However, continued U.S. data weakness and debt concerns are expected to ultimately support prices.

Wall Street Giants Bet on Fed’s Next Move

Major brokerages, including J.P. Morgan, Citigroup, and Wells Fargo, have forecast a 50-basis-point interest rate cut by the Federal Reserve in September. This follows last week’s U.S. jobs data, which hinted at a cooling labor market.

Jobless Claims: The Next Market Catalyst?

Market focus now shifts to the weekly initial U.S. jobless claims data, due at 1230 GMT. This report could provide further insights into the labor market’s health and influence rate cut expectations.

Geopolitical Chess: Middle East Tensions Simmer

Recent geopolitical events, including the killing of senior Hamas and Hezbollah members, have raised concerns about potential retaliatory strikes by Iran against Israel. Such tensions typically support safe-haven assets like silver.

Market Forecast: Silver’s Path to New Highs

The short-term outlook for silver appears cautiously bullish. While the metal may need to trade lower to attract fresh capital, analysts believe silver could potentially reach above the $30 level once markets gain a firmer understanding of the Fed’s policy pivot and the pace of future rate cuts. However, investors should remain vigilant as industrial demand, economic data and geopolitical developments continue to shape market sentiment.

XAG/USD is edging higher with all eyes on pivot price resistance at $27.23 and 200-day moving average support at $26.08. Trader reaction to these two prices could set the tone on Thursday.

A breakout above $27.23 won’t change the trend, but it could spook some of the weaker shorts to bailout, fueling further upside action. Ultimately, the market could test the 50-day moving average at $29.46, but it’s going to take a combination of short-covering and new buying to get there.

On the downside, a failure to hold the 200-day MA will be a sign of weakness. This could trigger a steep slide especially if gold tumbles along with it.