- Spot silver slumped to $22.00 on Thursday amid a bout of technical selling.
- Strong US macro data is likely not helping and eyes will be on US inflation numbers on Friday.
Spot silver (XAG/USD) saw a pickup in volatility on Thursday, after a bout of technical selling sent it to its lowest level since early October under $22.00. Spot prices had been supported by an uptrend over the course of the last week and when that short-term uptrend was broken on Thursday, selling pressure increased. With XAG/USD now trading around the $22.00 level, its losses on the day stand at nearly 2.0%. Its losses on the week are closer to 2.5%, whilst its losses since the emergence of the Omicron variant back on November 26 are above 7.0%.
Unlike spot gold prices, FX and bond markets, which have been more rangebound this week ahead of Friday’s key US inflation numbers and ahead of next week’s central bank bonanza, silver prices have continued the recent bearish run. Silver has outperformed gold by a significant margin since mid-November when it topped out close to $25.50 at its 200-day moving average. Perhaps this rejection of the 200DMA have made things worse for the precious metal over the last few weeks.
-637746625064475382.png)
In light of another very strong US labour market report, which showed weekly initial jobless claims falling to their lowest since 1969, and comes after JOLTs data showed job openings moving above 11M again at the end of October and official BLS data showing the unemployment rate dropping to 4.2% in November, downside makes sense.
The Fed is becoming increasingly attuned to just how tight the labour market is, and is very aware that inflation is currently running at more than three times its target. On that note, if the YoY rate of Consumer Price Inflation (expected to rise to 6.8% in November) is revealed to have surpassed 7.0% in November, that would add further selling pressure to precious metals like silver on expectations for a more hawkish Fed. The bears will be targetting a test of late-September lows around $21.50.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
EUR/USD holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Israel vs. Iran: Fear of escalation grips risk markets
Recent reports of an Israeli aerial bombardment targeting a key nuclear facility in central Isfahan have sparked a significant shift out of risk assets and into safe-haven investments.