Silver Price Forecast: XAG/USD rallies on traders’ rush to safety

Silver advances more than 2%, set to finish the week almost flat.
US jobs data was mixed, but the unemployment rate rose, signaling the cooling labor market.
Traders rushed into precious metals, uncertain about next week’s US inflation data, and punished the US Dollar.

Christian Borjon Valencia FXStreet

Silver price rallies on the back of a mixed US jobs report that witnessed more Americans than estimated added to the workforce. Even though that would result in a strong US Dollar (USD), the Unemployment rate edged up, taking pressure off the US Federal Reserve (Fed). At the time of writing, the XAG/USD is trading at $20.49 a troy ounce.

Federal Reserve expected to hike gradually as the unemployment rate upticks

Wall Street extended its losses due to a risk-off impulse. The US Department of Labor (DoL) revealed that Nonfarm Payrolls in February rose by 311,000 jobs, more than the 225,000 expected. January’s job numbers were lowered from 517,000 to 504,000. The jobless rate was 3.6%, higher than the forecast of 3.4%, indicating a weaker labor market. Wages rose by 4.6%, and attention turned to the US inflation data next week.

During the week, the US Fed Chair Jerome Powell said that higher and potentially faster interest rate hikes could be needed at his appearance in the US Congress. He added that the US economy remains solid and that the Fed will be watching Nonfarm Payrolls figures and next week’s February Consumer Price Index (CPI) readings.

Market participant’s reaction sees the Federal Reserve hiking 25 bps at the upcoming March meeting. Based on the US jobs data, money market futures expect Powell and Co. will cut rates by the end of 2023.

Additionally, investors sent the greenback tumbling, as shown by the US Dollar Index (DXY) dropping 0.87% at 104.360. US Treasury bond yields extended their losses, with the 10-year yield plunging 16 bps, at 3.741%, a tailwind for precious metals prices. XAG/USD is up more than 2% after testing YTD lows at around $19.92.

XAG/USD Technical levels

XAG/USD

Overview
Today last price	20.49
Today Daily Change	0.43
Today Daily Change %	2.14
Today daily open	20.06

Trends
Daily SMA20	21.2
Daily SMA50	22.58
Daily SMA100	22.18
Daily SMA200	20.95

Levels
Previous Daily High	20.3
Previous Daily Low	19.98
Previous Weekly High	21.27
Previous Weekly Low	20.42
Previous Monthly High	24.64
Previous Monthly Low	20.42
Daily Fibonacci 38.2%	20.17
Daily Fibonacci 61.8%	20.1
Daily Pivot Point S1	19.93
Daily Pivot Point S2	19.8
Daily Pivot Point S3	19.61
Daily Pivot Point R1	20.24
Daily Pivot Point R2	20.43
Daily Pivot Point R3	20.56

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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