Silver Prices Fall Slightly Amid Strong Employment Data and a Firmer Dollar

Tips 

• Silver prices fell somewhat as yields and the dollar increased.

• The dollar increased in value while the euro fell, as Russia-Ukraine remains a point of contention.

• Following good employment reports, a critical portion of the yield curve inverted.

• Oil prices have swung wildly as the EIA considers expanding its oil reserves.

Silver prices fell slightly but remained mostly unchanged on Friday as benchmark yields increased. The yield curve's 2s-10s segment, a crucial segment of the curve, is inverted following positive job statistics. Gold prices have fallen as rates have increased and the dollar has gained. Oil prices fell in erratic trading as members of the International Energy Agency (IEA) met to discuss the release of further oil reserves and the United States' intention to deploy 180 million barrels, or one million barrels per day, over the next six months. This is the largest release from the US Strategic Petroleum Reserves in history (SPR). Regardless of the release of reserves, oil supply will remain a problem in the coming months.

On Friday morning, a slew of economic figures were revealed. Nonfarm payrolls, a proxy for the total number of workers in the United States, increased by 431,000 in March. Despite rising inflation and the possibility of an economic slump, the reading came in slightly below the consensus prediction of 490,000 people. Unemployment decreased by 0.2 percent to 3.6 percent, falling short of estimates of 3.7 percent. Hourly wages increased by 0.4 percent on average, in line with predictions. The reading is used to closely monitor inflation. Today's economic numbers were unsurprising, indicating that the Fed will most likely hike rates at each of the remaining six FOMC meetings this year.

Technical Evaluation

Silver prices fell but recovered, stabilizing near the 24.72-24.78 zone as the dollar and yields strengthened as a result of the jobs report. The recently announced jobs data indicates a stronger labor market, implying that the Fed will continue its hawkish posture and proceed with six rate hikes. Additionally, progress in the Russia-Ukraine peace negotiations indicates a decreasing trend in prices. Silver prices have a finite upward potential.

Resistance is located near the 10-day moving average, which is located near 25.02. Support is located near the 50-day moving average, which is located near 24.04. Short-term momentum shifted negative as the fast stochastic crossed below the zero line, signaling a sell signal.

The medium-term momentum is negative, as indicated by the histogram's negative correlation with the MACD (moving average convergence divergence). The MACD histogram's trajectory is negative but decelerating, indicating an upward trend in price movement.