Silver prices still stuck to its 21 and 50DMAs just above $24.00

  • Spot silver (XAG/USD) prices trade flat above $24.00 and were choppy in the aftermath of US NFP data.
  • XAG/USD is currently consolidating with an ascending triangle.

Spot silver (XAG/USD) trades flat on Friday, having largely remained magnetised to the $24.00 level and its 12 and 50-day moving averages (DMA) just above it.

Silver choppy post-NFP

Silver prices saw a two-way reaction to Friday’s official US jobs market data. As a recap; the report was softer than expected, with the US economy adding just 245K jobs (expected was gains of 469K) and though the unemployment rate dropped 0.2% to 6.9%, this was driven by a 0.2% drop in the participation rate to just 61.5%, still nearly 2% below pre-pandemic levels.

Immediately in wake of the data, XAG/USD spiked higher above $24.40 (fresh highs for the week), before immediately reversing back below $24.00. Since the choppy initial reaction, prices have consolidated above $24.00.

Waning US labour market momentum likely means that the Fed will deliver more stimulus (either via providing more in-depth guidance for their asset purchase programme or via tweaking its contents or even size), which ought to be a positive for precious metals (as it signals more money supply expansion for longer). However, it also implies a higher probability of Congress delivering US fiscal stimulus prior to the election, which is likely to be a negative for safe havens such as silver.

Silver prices consolidate within an ascending triangle

Over the past few days, silver prices have been consolidating within an ascending triangle; to the upside, the price action is being constrained by resistance around $23.30. Meanwhile, an uptrend linking the 2 and 3 December and Friday’s lows is acting as resistance. Should this ascending triangle break to the upside, the 20 November high at just above $24.50 would be the immediate area to watch and above that a long-term downtrend linking the 7 August, 1 September and 9 November highs, which will likely come into play just above $24.80.

Meanwhile, if the formation breaks to the downside, a test of the 2 December lows and the 24 and 25 November highs in the $23.50s will be worth watching.

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