Silver (XAG/USD) traded modestly higher on Monday, rebounding after a nearly 8% decline on Friday that followed a stronger-than-expected US Nonfarm Payrolls (NFP) report. This report reinforced expectations that the Federal Reserve will maintain higher interest rates for an extended period, pressuring precious metals like silver. At the time of reporting, XAG/USD was trading around $68.50, having touched an intraday low of $66.18, its lowest level since March 25 [1].
The rebound in silver coincided with a softening US Dollar, attributed to reports from Iran's Fars News Agency that Iran had ended its military operations against Israel after renewed hostilities over the weekend. Additionally, US President Donald Trump stated that peace talks with Tehran are ongoing, which has contributed to cautious optimism among traders regarding a potential end to the Middle East conflict [1].
Despite the mild recovery, the upside for silver appears limited due to persistent expectations of a hawkish Federal Reserve. The technical outlook remains bearish, with XAG/USD trading below both the 50- and 100-day Simple Moving Averages (SMAs), while the 200-day SMA near $67.94 is providing immediate support. Momentum indicators, such as the Relative Strength Index (RSI) at 37, suggest bearish momentum is still present, though not yet oversold. The Average Directional Index (ADX) near 17 indicates a weak trend, reflecting a lack of strong conviction in the recent decline [1].
Looking ahead, traders are focused on upcoming US inflation data, which could offer further guidance on the Fed's monetary policy and influence the next move in both the US Dollar and XAG/USD. Key technical levels to watch include resistance at the 50-day SMA ($76.15) and 100-day SMA ($80.38), while a daily close below the 200-day SMA ($67.94) would reinforce the bearish outlook and potentially expose silver to deeper losses [1].
CONCLUSION
Silver has staged a modest rebound after a sharp selloff, but downside risks persist due to expectations of a hawkish Federal Reserve and bearish technical signals. Market participants are closely watching upcoming US inflation data for further direction. The overall outlook remains cautious, with key support and resistance levels in focus.