Silver (XAG) Forecast: Will Payroll Data Push Prices Beyond $31.71 Resistance?

Silver Prices Steady as Technical Levels and Payroll Data Take Center Stage

Silver prices remained mostly unchanged on Wednesday, with traders focusing on Friday’s Non-Farm Payrolls (NFP) report and key technical levels that could determine the metal’s near-term direction. The report is expected to show a 200,000-job increase for November, potentially influencing Federal Reserve policy and silver price movements.

At 13:30 GMT, XAG/USD is trading $31.28, down $0.02 or -0.07%.

Technical Analysis: Silver Struggles at $31.29 Pivot

Silver is currently straddling a pivotal technical level at $31.29. A sustained move above this level would signal renewed buying interest, with the 50-day moving average at $31.71 emerging as the next resistance. A breakout above $31.71 could shift the intermediate trend to bullish, paving the way for a rally toward the retracement zone between $32.27 and $32.89.

On the downside, failure to hold $31.29 could indicate selling pressure, triggering a potential pullback toward $30.61. This level would serve as a key support area in the event of weaker momentum or unfavorable macroeconomic data.

Economic Data Watch: NFP and Jobless Claims in Focus

The November NFP report, alongside initial jobless claims data due Thursday, will provide critical insights into the strength of the U.S. labor market. The Federal Reserve has signaled a cautious stance on interest rate cuts despite robust economic resilience, with markets pricing in a 74% probability of a 25-basis-point cut at the December meeting, according to the CME Group’s FedWatch Tool.

Treasury Yields and Rate Expectations Add Pressure

Lower interest rates traditionally benefit silver by reducing the opportunity cost of holding non-yielding assets. However, rising Treasury yields, with the 10-year climbing to 4.205% and the 2-year reaching 4.152%, have increased competition for safe-haven assets like silver.

Analyst Insights: Seasonal Trends vs. Strong Labor Market

Market analysts see limited volatility in silver prices until more clarity emerges from the NFP report. Seasonal U.S. dollar weakness could provide short-term support, but strong labor data or further gains in yields may cap any rally.

Short-Term Market Forecast: Key Levels to Watch

Silver’s immediate direction hinges on the outcome of Friday’s payroll data and its interaction with the $31.29 pivot. A softer-than-expected NFP result could drive prices higher, potentially challenging the $31.71 moving average and targeting the $32.27-$32.89 range. Conversely, robust payrolls or rising yields may lead to a retreat toward $30.61. With Fed policy in flux, silver is likely to remain in a holding pattern until decisive market catalysts emerge.

More Information in our Economic Calendar.