Silver price (XAG/USD) continues to hold steady above the $28.00 mark as investors anticipate potential rate cuts by the Federal Reserve. The CME FedWatch tool indicates a 71% probability of interest rate reductions in September, up from 66% previously. This speculation has been fueled by concerns over the weakening US labor market, with jobless claims rising to 231K for the week ending May 3, the highest in over eight months.
Recent official labor market data also indicates slower job growth, suggesting that the US job market is struggling under the Fed’s current monetary policy framework. This has been positive for non-yielding assets like Silver, but has limited the upside for the US Dollar and bond yields. Despite this, the US Dollar Index (DXY) remains supported above 105.00, while 10-year US Treasury yields have risen to 4.49%.
Looking ahead, the US economic calendar for next week is packed with key data releases including the Producer Price Index (PPI), Consumer Price Index (CPI), and Retail Sales data. Of particular interest will be the CPI data, which will influence market expectations for potential Fed rate cuts in the future.
From a technical perspective, Silver price has rebounded strongly after finding support near $26.09, a previous resistance level. The outlook has improved as Silver trades above the 20-period Exponential Moving Average (EMA) at $27.30. The 14-period Relative Strength Index (RSI) has entered bullish territory, suggesting a positive momentum for Silver going forward.
Overall, Silver price remains supported above $28.00 as investors speculate on potential Fed rate cuts in light of weakening US labor market conditions. Technical indicators point to a bullish outlook for Silver, but market focus remains on upcoming US economic data releases and their potential impact on Fed policy decisions.
