SILVER PRICE FORECAST: XAG/USD RETREATS FROM $26.80 AMID UNCERTAINTY AHEAD OF US NFP

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  • Silver price drops from $26.80 as US Dollar, bond yields rebound ahead of US Employment data.
  • The US Employment data will influence speculation for Fed rate cuts in June.
  • The Fed is still confident of rate cuts this year despite progress in disinflation has stalled.

Silver price (XAG/USD) falls back sharply to $26.30 while attempting to recapture the crucial resistance of $27.00 during the European session on Thursday. The white metal faces pressure as the US Dollar and bond yields attempt to recover amid uncertainty ahead of the United States Nonfarm Payrolls (NFP) and the ISM Services PMI data for April, which will be published on Friday.

The US NFP data would significantly influence market expectations for Federal Reserve (Fed) rate cuts from the June meeting. Economists have anticipated that US employers recruited 243K jobs, lower than 303K additions registered in March. The Unemployment Rate is forecasted to have remained steady at 3.8%.

Investors will keenly focus on the US Average Hourly Earnings data. The annual Average Hourly Earnings are expected to have grown at a slower pace of 4.0% from 4.1% in March, with steady 0.3% growth on a month-on-month basis. Average Hourly Earnings are a leading indicator of wage growth, which indicates the current status of households’ spending and eventually influences price pressures.

The US Dollar Index (DXY) rebounds to 105.75 and 10-year US Treasury yields edge up to 4.61. The US Dollar and bond yields tumbled on Wednesday after less hawkish interest rate guidance from the Federal Reserve (Fed) than feared. The Fed remains optimistic over eventual rate cuts this year despite risks of a slowdown in the disinflation process.


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