Key Moments
- Silver (XAG/USD) bounced from near $56.60 but remained 1.55% lower around $57.40 during Tuesday’s Asian trade.
- Market pricing via the CME FedWatch tool pointed to nearly an 80% probability of at least one Federal Reserve rate hike this year.
- Traders monitored U.S. JOLTS Job Openings for May and looked ahead to June Nonfarm Payrolls as the main catalyst for silver this week.
Macro Drivers Weigh on Silver
Silver prices (XAG/USD) found modest support after dipping to around $56.60 in the Asian session on Tuesday, but the metal still traded about 1.55% lower near $57.40 at the time of writing. The broader tone remained negative as market participants continued to anticipate that the Federal Reserve’s next policy move this year will be a rate increase.
Data from the CME FedWatch tool indicated that the probability of the Fed implementing at least one interest rate hike this year was close to 80%. This outlook has been unfavorable for non-yielding assets such as silver, which typically struggle in an environment of higher interest rates.
Key U.S. Labor Releases in Focus
Investors turned their attention to upcoming U.S. economic releases, with May’s Job Openings and Labor Turnover Survey (JOLTS) due at 14:00 GMT. Consensus expectations pointed to 7.3 million job openings, down from 7.618 million in April.
Beyond JOLTS, the principal scheduled event for silver markets this week was the U.S. Nonfarm Payrolls (NFP) report for June, set for release on Thursday. Market participants planned to closely analyze labor-related indicators after comments from new Fed Chairman Kevin Warsh, who stated that forward-looking guidance from the central bank is not “well suited to the current policy conjuncture”.
Technical Picture: Bearish Bias Persists
From a technical standpoint, XAG/USD traded on the back foot around $57.40, extending its decline well below the 20-day exponential moving average (EMA) at $64.57 and maintaining a negative short-term outlook. The wide gap between the spot price and the 20-day EMA pointed to sustained selling pressure.
The Relative Strength Index (RSI) stood at 30.23, just above the traditional oversold threshold. This configuration indicated that while bearish momentum remained in control, the move was nearing levels where selling could start to lose intensity.
| Technical Level | Price | Implication |
|---|---|---|
| Spot price (XAG/USD) | $57.40 | Trading below key moving average, bearish tone |
| 20-day EMA | $64.57 | Recovery above would be needed to ease downside bias |
| Initial resistance | $61.01 (March 23 low) | First upside barrier before the 20-day EMA |
| Immediate support | $54.86 (October 16 high) | Break below would open the way toward $50.00 |
| Next downside target | $50.00 | Level exposed if $54.86 support fails |
| RSI | 30.23 | Near oversold, downside momentum still dominant |
The first notable resistance on the upside was identified at the March 23 low of $61.01, followed by the 20-day EMA near $64.57. Regaining the latter would be required to alleviate the current bearish narrative and support a more durable rebound. On the downside, the October 16 high at $54.86 served as immediate support; a clear break below that level would leave the metal vulnerable to a move toward $50.00.
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