Silver Price Analysis: XAG/USD on the back foot in mid-$24.00s as US yields/dollar nudge higher pre-NFP

  • US yields and the buck are a little higher pre-NFP and this is keeping silver prices on the back foot.
  • Spot prices continue to see selling pressure ahead on the $25.00 level, with recent Russo-Ukraine commentary positive.
  • If the US data is robust, XAG/USD might be pressured back towards weekly lows in the $24.00 area.

While off earlier session highs, US yields have picked up a little on Friday in the run-up to the release of the official March US labour market report at 1330BST, which is then followed by the release of the March US ISM Manufacturing PMI survey at 1500BST. This, coupled with a mild continued rebound in the US dollar which has seen the DXY recover to the 98.50 area, is weighing modestly on silver. Spot prices (XAG/USD) trade about 0.5% lower on the day in the $24.60s area. Notably, the $25.00 per troy ounce level has been acting as solid resistance since Tuesday.

This week’s US data so far (JOLTs, ADP, Initial Jobless Claims, Core PCE) have all been robust and supportive of the notion that the US economy remains strong, with a tight labour market and elevated inflation. Upcoming data on Friday should continue to signal this, which means that US yields and the US dollar are likely to remain supported close to recent highs. That suggests the prospect for a breakout above $25.00 on Friday isn’t great, particularly against the backdrop of recent positive commentary from Russian Foreign Minister Sergey Lavrov on Russo-Ukraine peace talks.

Talks between the two warring countries recommence on Friday, meaning that geopolitics is set to remain a key focus. Any signs that further progress has been made towards a peace deal, combined with what is very likely to be more robust US economic data, could weigh on XAG/USD. Short-term bears will be eyeing a potential retest of weekly lows in the $24.00 area, where the 200-Day Moving Average resides.

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