- Silver price jumps sharply to near $29.00 as the Fed is expected to make a larger interest rate cut this month.
- Weak private sector employment data weighs on the US dollar and bond yields.
- Investors are awaiting US NFP data for August, due out on Friday.
Silver (XAG/USD) price is making a vertical move higher to near $29.00 in the North American session on Thursday. The white metal is experiencing strong buying interest as surprisingly weak US (US) ADP employment change data for August renewed fears of a deterioration in labor market conditions.
Private employment data in the early American session showed new payrolls were lower at 99,000, compared with a downwardly revised 111,000 from 122,000 in July. Economists had estimated that new private payrolls would have risen to 145,000.
Weak private sector employment data has fueled market speculation that the Federal Reserve (Fed) will begin the policy easing cycle this month in an aggressive manner. Signs of slowing labor demand have weighed heavily on the US Dollar (USD) and bond yields.
The US Dollar Index (DXY), which tracks the value of the greenback against six major currencies, is down near 101.00. The yields on 10-year US Treasury bonds are down near 3.73%. Lower yields on interest-bearing assets strengthen the appeal of non-yielding assets, such as Silver, as they reduce the opportunity cost of holding an investment in them.
Looking ahead, the US Nonfarm Payrolls (NFP) data for August will be closely watched, due out on Friday. Meanwhile, investors are awaiting the US ISM Services PMI data for August, due out at 14:00 GMT.
Technical analysis of Silver
Silver price is trading in a channel formation on a daily time frame, which is slightly tilted downwards. The asset is sharply recovering and trying to break above the 20-day exponential moving average (EMA), which is trading around $28.80.
The 14-day RSI is oscillating within the 40.00-60.00 range, suggesting consolidation ahead.
Silver daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
