- Silver price plummets to $23 as the US labor market remains resilient.
- US Q2 Unit Labor Costs jumped to 2.2% vs. expectations and the former release of 1.6%.
- Silver price corrects vertically to near the 200-day EMA, which trades around $23.30.
Silver price (XAG/USD) corrected significantly to near $23.00 as United States labor market indicators outperformed expectations. The white metal faces selling pressure as the US Department of Labor reported that individuals claiming jobless benefits for the first time dropped to 216K for the week ending September 01 vs. expectations of 234K and the former release of 229K.
Meanwhile, Q2 Unit Labor Costs jumped to 2.2% vs. expectations and the former release of 1.6%. Decent wage growth would keep households’ disposable income higher and might eventually keep inflationary pressures stubborn.
The S&P500 opens on a negative note as the tight US labor market would allow the Federal Reserve (Fed) to keep doors open for further policy tightening. The Fed is widely expected to keep interest rates unchanged in September monetary policy. As per the CME Fedwatch Tool, traders see a 93% chance for interest rates to remain unchanged at 5.25%-5.50% in the September policy meeting.
The US Dollar Index (DXY) edges marginally lower from its five-month high of 105.10. However, the upside bias is still solid as the market mood is quite cautious. For further action, investors will focus on the Consumer Price Index (CPI) for August, which will be released next week.
Silver technical analysis
Silver price corrects vertically to near the 200-day Exponential Moving Average (EMA), which trades around $23.30. The white metal forms a Head and Shoulder chart pattern, which is a bearish reversal pattern. The neckline of the aforementioned formation is placed from June 22 low at $22.18.
The Relative Strength Index (RSI) (14) drops to near 40.00. A bearish impulse would be activated if it breaks below the same.
Silver daily chart
-638296915233165909.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0900 after US data
EUR/USD stays in negative territory below 1.0900 in the American session on Thursday. The US Department of Labor reported that there were 222,000 first-time application for unemployment benefits last week, limiting the USD's recovery and helping EUR/USD limit its losses.
GBP/USD corrects lower toward 1.2650 on modest USD recovery
After touching its highest level in over a month at 1.2700, GBP/USD reversed its direction and declined toward 1.2650 on Thursday. The modest USD rebound seen following Wednesday's sharp decline makes it difficult for the pair to regain its traction.
Gold finds resistance near $2,400, retreats toward $2,380
Gold advanced toward $2,400 on Wednesday as US Treasury bond yields pushed lower following the April inflation data. The recovery in US yields combined with the US Dollar's resilience, however, causes XAU/USD to retreat toward $2,380 on Thursday.
Bitcoin likely to return to all-time high of $73,949, QCP Capital says
Bitcoin (BTC) price is likely to rally back to $74,000 in the coming weeks, it's all-time high reached in March, riding on three bullish catalysts, according to crypto trading firm QCP Capital.
Dow Jones Industrial Average soars 350 points, sets new all-time high as rate cut hopes surge
The Dow Jones Industrial Average clipped into a fresh all-time high on Wednesday, gaining almost nine-tenths of a percent during the US market session after US Consumer Price Index inflation slipped further back.