Spot Silver pulled back from a fresh record high of $58.98/oz. on Thursday as a result of a probable technical correction.
The 14-day Relative Strength Index (RSI) has indicated that Silver prices rose quite much for a too short period of time (overbought conditions, with index readings above the 70.00 threshold). This prompted investors to look for a suitable opportunity to book their profits.
Despite the current pullback, the white metal remains underpinned by robust industrial demand, persistent supply deficit and expectations of an interest rate cut by the Federal Reserve this month.
Weak US private payrolls data added to those expectations.
Employers in the US private sector cut 32,000 jobs in November, which has been the largest drop in payrolls since March 2023. The ADP figures heightened concerns over a cooling US labor market.
The data also aligned with dovish remarks by Fed officials. Fed Governor Christopher Waller said last week that the US job market was weak enough to warrant another 25 basis point rate cut in December.
And, New York Fed President John Williams said that a near-term rate cut remained possible, with labor market weakness posing a higher risk than elevated inflation.
Markets are now pricing in about an 89% chance of a 25 basis point Fed rate cut in December, compared to an 83% chance a week earlier.
Markets are also pricing in three additional rate cuts by the end of 2026.
Lower interest rates tend to reduce the opportunity cost of holding Silver, which pays no interest.
Spot Silver was last down 1.91% on the day to trade at $57.39 per troy ounce.
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