Silver (XAG/USD) prices retreated to approximately $66.30 during the European trading session on Friday, following a fresh five-day high near $68.00. This pullback comes as investors exercise caution ahead of the United States Nonfarm Payrolls (NFP) data for August, scheduled for release at 12:30 GMT [1].
TD Securities forecasts a partial recovery in the US labor market, projecting August NFP to rebound to 95,000 after July saw a decline of 23,000 jobs. The unemployment rate is expected to remain steady at 4.1%, with balanced risks according to TD Securities [1]. Market participants are closely watching the NFP report for signals regarding the Federal Reserve’s monetary policy outlook. TD Securities suggests that even a modestly hawkish employment report would reaffirm the Fed's focus on inflation but is unlikely to prompt immediate rate hikes, indicating that a stronger jobs print would not materially alter the current policy stance [1].
Fed interest rate expectations have diminished following comments from Governor Christopher Waller, who noted signs of disinflation in recent data. Commerzbank analysts highlighted lingering uncertainty over the US rate outlook, underscored by Waller’s remarks that a rate hike is not necessarily required. They further emphasized that next week’s inflation data will be the key input for the Fed’s upcoming policy decision, thereby reducing the significance of the current employment report [1].
Technically, XAG/USD trades at $66.73, maintaining a bullish near-term bias as it remains above the 20-day exponential moving average (EMA) at $65.71. The uptrend structure is supported by this short-term EMA, and the Relative Strength Index (RSI) at 55 indicates moderate bullish momentum without signaling overbought conditions. Immediate support is seen at the 20-day EMA, while the August high at $71.12 represents a key resistance level [1].
CONCLUSION
Silver prices have pulled back amid investor caution ahead of the US NFP release, with technical indicators showing a bullish bias supported by the 20-day EMA. Market sentiment is tempered by reduced Fed rate hike expectations and a shift in focus toward upcoming inflation data. The employment report is unlikely to significantly alter the Fed's policy stance, keeping silver's near-term outlook moderately positive.