Silver (XAG) Daily Forecast: Can Silver Rebound Above $31.40 or Is More Downside Ahead?

Market Overview

Silver prices (XAG/USD) failed to sustain overnight gains, edging lower to around $31.60 per troy ounce during Asian trading hours on Thursday. The decline was largely attributed to robust US labor market data, which has tempered expectations of aggressive interest rate cuts by the Federal Reserve (Fed).

With the US dollar surging to a three-week high, demand for silver—a non-yielding asset—has diminished.

Silver’s recent performance is primarily being influenced by macroeconomic factors and market sentiment rather than any developments in the industrial or physical demand sectors.

“Silver has been caught in the crosscurrents of a stronger dollar and shifting expectations around Fed policy,” noted Jane Hartman, a senior metals analyst at Sigma Capital. “Absent major demand drivers, prices remain vulnerable to broader market movements.”

Robust US Economic Data Boosts Dollar, Pressures Silver

The latest US economic data reveals a surprisingly resilient labor market. The Job Openings and Labor Turnover Survey (JOLTS) for August showed a 329,000 increase in job vacancies, pushing total job openings to 8.04 million, up from 7.711 million in July.

Furthermore, ADP’s report on Wednesday indicated that private-sector employers added 143,000 jobs in September, surpassing the expected 120,000 additions and up from August’s revised figure of 103,000.

These figures have solidified expectations that the Fed may not implement aggressive rate cuts in the near term. Jerome Powell, the Fed Chair, recently hinted that the central bank will likely maintain a cautious stance as long as the labor market remains resilient.

Consequently, the US dollar has strengthened, making silver more expensive for investors holding other currencies.

Short-Term Forecast

Silver prices remain under pressure near $31.34 as a strong US dollar dampens demand. Key resistance at $31.62; support holds at $31.08. Expect range-bound trading.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) prices have slipped to $31.34, down 0.56%, signalling a cautious market tone. The metal hovers below its pivot point at $31.40, a key level to watch for short-term momentum. Immediate resistance stands at $31.62, with subsequent resistance levels at $31.86 and $32.18.

On the downside, immediate support is pegged at $31.08, with deeper support at $30.88 and $30.67, which could come into play if bearish sentiment persists.

Technical indicators show the 50-day EMA at $31.52, acting as resistance, while the 200-day EMA at $30.72 offers long-term support. Overall, silver remains bearish below $31.40, and a breakout above this level could shift sentiment to a more bullish bias.