Silver (XAG/USD) prices attracted slight bids after falling to near $56.60 during the Asian session on Tuesday, but remained down 1.55% at around $57.40 at press time [1]. The white metal continues to face pressure due to strong expectations that the Federal Reserve's next monetary policy move this year will be a rate hike. The CME FedWatch tool indicates an almost 80% probability of at least one interest rate increase by the Fed in 2024, which is generally negative for non-yielding assets like silver [1].
Investors are closely watching the upcoming US JOLTS Job Openings data for May, scheduled for release at 14:00 GMT. The consensus expectation is for 7.3 million new jobs, down from 7.618 million in April [1]. Additionally, the US Nonfarm Payrolls (NFP) data for June, due on Thursday, is seen as a major trigger for silver prices this week. Market participants are paying particular attention to employment data, especially after comments from new Fed Chairman Kevin Warsh, who noted that forward-looking statements from the central bank are not 'well suited to the current policy conjuncture' [1].
From a technical perspective, XAG/USD is trading well below its 20-day exponential moving average (EMA) at $64.57, maintaining a bearish near-term bias. The Relative Strength Index (RSI) stands at 30.23, just above oversold territory, indicating that while downside momentum is strong, it may be nearing exhaustion. Key resistance levels are identified at the March 23 low of $61.01 and the 20-day EMA at $64.57. On the downside, immediate support is at the October 16 high of $54.86, with a break below this level potentially exposing silver to $50.00 [1].
CONCLUSION
Silver prices remain under pressure due to expectations of a Fed rate hike and upcoming US employment data releases. Technical indicators suggest persistent selling, but downside momentum may be nearing exhaustion. Market participants are likely to remain cautious until key US jobs data is released.