Silver Price Forecast: XAG/USD corrects further in countdown to US NFP data

• Silver price retreats further to near $51.40 ahead of the US NFP data.
• The US Dollar gains sharply with US NFP taking centre stage.
• Fed’s Logan said last week that the labor market remains broadly balanced, if anything, slightly tight.

Silver price (XAG/USD) extends its correction from its weekly high of $53.45 to near $51.40 in the European trade on Friday. The white metal is under pressure as the US Dollar regains ground, with investors turning cautious ahead of the United States (US) Nonfarm Payrolls (NFP) data for October, which will be published at 13:30 GMT.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.36% higher to near 101.92.

Technically, a higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.

What are estimates for US NFP and other key labor market data?

According to estimates, US employers hired 65K new workers, higher than 29K in September. The Unemployment Rate is seen as steady at 4.2%.

Average Hourly Earnings, a key measure of wage growth, is expected to have grown at a moderate pace of 2.9% Year-on-year (YoY) against 3% in September. On a monthly basis, the wage growth measure is seen rising 0.3% against the previous reading of 0.1%.

How will US NFP impact Fed’s monetary policy expectations?

The US NFP data is expected to have a limited impact on Federal Reserve’s (Fed) interest rate expectations as recent remarks from officials after the monetary policy decision in later October have indicated that the central bank will on the monetary tightening path amid upside inflation risks.

Dallas Fed Bank President Lorie Logan said last week that “at least two more quarter-point rate hikes” are needed, citing that it is “unacceptable” the inflation is not headed back to the 2% target. About employment market, Logan said, “Labor market is balanced, perhaps tightening a bit.”

Silver Technical Analysis

In the weekly chart, XAG/USD trades at $51.45, extending a bearish near-term bias as price holds below the 9-week Exponential Moving Average (EMA) at $56.85 and well under the 61.8% Fibonacci retracement at $59.35. The Relative Strength Index (14) at 36.47 hovers just above oversold territory, hinting that while downside momentum has eased slightly, sellers still retain control after the prolonged decline from the cycle highs.

On the topside, initial resistance is seen at the 9-week EMA around $56.85, followed by the 61.8% retracement at $59.35, with further barriers at the 50% retracement near $71.24 and the 38.2% level at $83.13 if a stronger rebound develops. On the downside, the 78.6% Fibonacci retracement at $42.41 offers the first meaningful support, ahead of the structural low around $20.84, which marks the 100% retracement of the broader decline.

(The technical analysis of this story was written with the help of an AI tool. Know more.)