Silver (XAG/USD) climbed to a weekly high near $62.15 during early European trading on Friday, extending its rally in response to a weaker-than-expected US Nonfarm Payrolls (NFP) report. This data has led to a reduction in market expectations for Federal Reserve interest rate hikes this year. According to the CME FedWatch tool, traders now see nearly a 52% chance of a US rate hike by September, down from 66% before the jobs data was released [1].
Geopolitical developments are also in focus, with traders monitoring peace negotiations in the Middle East between the US and Iran. Renewed tensions, particularly warnings from Iran’s joint military command about a 'decisive and swift response' to any US interference in the Strait of Hormuz, could raise inflation concerns and impact silver prices. US President Donald Trump stated, 'I think they have accepted nearly everything we require,' regarding the negotiations [1].
From a technical perspective, XAG/USD remains in a bearish near-term setup, trading below the Bollinger middle band and well under the 100-day moving average. The Relative Strength Index (RSI) is around 42, indicating subdued bullish momentum and suggesting that recent gains may be corrective within a broader downtrend. Resistance levels are identified at $63.50, $70.00, $71.80, and $75.00, while support is seen at $60.00 and $55.25 [1].
The market is expected to closely watch further US economic data and developments in the Middle East for additional direction. The combination of softer US economic data and geopolitical uncertainty is providing some support to silver, but the overall technical outlook remains cautious [1].
CONCLUSION
Silver's rise above $62 is driven by softer US jobs data, which has reduced expectations for Fed rate hikes, and ongoing geopolitical tensions in the Middle East. However, technical indicators suggest the rally may be corrective within a broader bearish trend. Market participants are likely to remain cautious, awaiting further economic and geopolitical developments.