- Silver price delivers a volatile action as investors carefully examine the US NFP report.
- The US Dollar dropped as investors hoped that slower wage growth would ease the consumer spending momentum.
- Silver price faces some selling pressure in its upside journey toward the horizontal resistance plotted around $25.27.
Silver price (XAG/USD) demonstrates a volatile action above $24.50 as investors carefully examine the United States Nonfarm Payrolls (NFP) data for August. The US Bureau of Labor Statistics reported that fresh payrolls were 187K, outperformed estimates of 170K, and downwardly revised July’s reading of 157K.
The Unemployment Rate rose sharply to 3.8% vs. estimates and the former print of 3.5%. Monthly Average Hourly Earnings grew at a slower pace of 0.2% while investors anticipated a 0.3% pace in wage growth. In July, the labor cost index gained at a 0.4% pace. The annual Average Hourly Earnings decelerated nominally to 4.3% against the estimates and the former release of 4.4%.
Slower wage growth might offset the impact of higher-than-anticipated fresh payrolls, which would allow the Federal Reserve (Fed) to keep the interest rate policy unchanged on September 20. Meanwhile, investors still await the US ISM manufacturing PMI, which will be released at 14:00 GMT.
The US Dollar Index (DXY) drops marginally to near 103.40 as investors hope that slower wage growth will ease the consumer spending momentum and bring inflation under control. Also, 10-year US Treasury yields dropped to near 4.10%.
Silver technical analysis
Silver price faces some selling pressure in its upside journey toward the horizontal resistance plotted from the July 20 high around $25.27 on a two-hour scale. Upward-sloping 20-period Exponential Moving Average (EMA) continues to provide support to the Silver bulls.
The Relative Strength Index (RSI) (14) drops into the 40.00-60.00 range from the bullish range of 60.00-80.00, which indicates that the upside momentum has faded.