Silver (XAG/USD) resumed its near-term bullish trend on Friday, reaching fresh six-week highs at $63.90, after a brief pause on Thursday. The metal is currently trading at $63.78, maintaining a bullish bias as it holds above the key resistance area at $63.30, though a confirmed break above this level is still pending. This rally is supported by diminishing expectations that the Federal Reserve will hike interest rates in the coming months, which has contributed to silver's best weekly performance since February [1].
Technical indicators reflect strong upward momentum, with the Relative Strength Index (14) at overbought levels around 74, and the Moving Average Convergence Divergence (MACD) remaining positive, suggesting that the rally may not yet be exhausted. A decisive break above the $63.30 resistance would confirm a bullish trend shift, potentially targeting the June 22 highs near $67.00 and the June 17 high around $71.60. Conversely, a pullback below $63.30 could expose Thursday's low at $60.90 and the August 3 low at $56.57 [1].
Market participants are exercising caution ahead of the key Nonfarm Payrolls report, with Danske Bank analysts forecasting July's payrolls at 70,000 and the unemployment rate unchanged at 4.2%. The bank notes that while leading data indicate solid labor market conditions, weak labor supply growth could weigh on employment growth. The unemployment rate remains a primary focus for the Federal Reserve [1].
The broader context for silver's price movement includes its status as a safe-haven asset, its sensitivity to interest rate expectations, and its inverse relationship with the US Dollar. Lower interest rates and a weaker dollar typically support higher silver prices [1].
CONCLUSION
Silver's rally to six-week highs is driven by fading Fed rate hike expectations and strong technical momentum. Investors remain cautious ahead of the US Nonfarm Payrolls report, which could influence future price direction. A confirmed break above $63.30 would reinforce the bullish outlook for silver in the near term.