- Silver price surges to near $30.50 as unexpectedly weak US ADP Employment data weighs on the US Dollar.
- Fed Powell admitted slight progress in inflation.
- Investors await the US ISM Services PMI and the FOMC minutes.
Silver price (XAG/USD) rallies to near $30.50 in Wednesday’s American session. The white metal strengthens as the US Dollar (USD) fell on the backfoot after Federal Reserve (Fed) Chair Jerome Powell said in the European Central Bank (ECB) Forum on Central Banking on Tuesday that recent data suggests the United States (US) economy has returned on the disinflationary path.
Fed Powell acknowledged that the central bank has made quiet a bit progress on inflation. In spite of that policymakers want to see inflation declining for months before lowering interest rates. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, corrects further to near 105.50. 10-year US Treasury yields decline to near 4.42%. Lower yields on interest-bearing assets and the US Dollar reduce the opportunity cost of holding an investment in non-yielding assets, such as Silver.
Meanwhile, investors turn uncertain over labor market conditions as private payrolls unexpectedly dropped in June. The ADP Employment report showed that fresh payrolls came in at 150K. Economists forecasted them to have remained slightly higher at 160K than the prior release of 152K.
Going forward, investors will focus on the US ISM Services PMI for June and the Federal Open Market Committee (FOMC) minutes of the June meeting.
Silver technical analysis
Silver price attempts to deliver a breakout of the Falling Channel chart formation on a daily timeframe. This suggests that a corrective move in the Silver price has now concluded and it has resumed its upside journey.
The white metal climbs above the 20-day Exponential Moving Average (EMA) near $29.60, suggesting that the near-term trend is bullish.
The 14-period Relative Strength Index (RSI) approaches 60.00. A decisive break above the same would shift momentum towards the upside.
Silver daily chart
(This story was corrected at 13:10 GMT on Wednesday to say in the first paragraph that "The white metal strengthens as the US Dollar (USD) fell on the backfoot" not weakens)
Economic Indicator
ADP Employment Change
The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Last release: Wed Jul 03, 2024 12:15
Frequency: Monthly
Actual: 150K
Consensus: 160K
Previous: 152K
Source: ADP Research Institute
Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.
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
AUD/USD: Extra gains need to clear 0.6400
AUD/USD rose for the third day in a row, approaching the key 0.6400 resistance on the back of the acute pullback in the US Dollar amid mounting recession concerns and global trade war fear.
EUR/USD: Powell and the NFP will put the rally to the test
EUR/USD gathered extra steam and advanced to multi-month peaks near 1.1150, although the move fizzled out somewhat as the NA session drew to a close on Thursday.
Gold looks offered near $3,100
Prices of Gold remain on the defensive on Thursday, hovering around the $3,100 region per troy ounce and retreating from earlier all-time peaks near the $3,170 level, all against the backdrop of investors' assessment of "Liberation Day".
Interoperability protocol hyperlane reveals airdrop details
The team behind interoperability protocol Hyperlane shared their upcoming token airdrop plans happening at the end of the month. The airdrop will occur on April 22, and users can check their eligibility to receive $HYPER tokens via a portal provided by the Hyperlane Foundation by April 13, the team shared in a press release with CoinDesk.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.