The gain in silver prices that started from the March 31 low at $23.81 looks to have abruptly ended today as the US ISM report and ADP employment figures beat expectations, causing silver to slide and the US Dollar to gain.

 

According to the ADP report, 978K new jobs were created, an uptick from 654K the month prior and higher than the 650K expected. Whilst, the ISM Services report rose to 64 from 62.7 and higher than the 63 anticipated. Traders are now awaiting Friday’s Non-Farm Payroll report to see if the US unemployment rate could turn lower from 6.1% to 5.9% expected.

 

A move lower would be well received by the Federal Reserve. But it would still be far away from the record low unemployment rate at 3.5% just before the pandemic struck. I, therefore, think that the Federal Reserve will remain dovish for a few more months. However, the markets are anticipating a hawkish Federal Reserve in less time than that, which is why silver prices are lower today.

 

Silver prices technical outlook

Seen from a long-term perspective, silver prices remain trapped in an ascending triangle pattern, and a break to the $29.40 level might send the price as high as $35.96. However, given that the price is trapped between the pattern, the most likely step is that the May high of $28.79 will act as a multi-week high, and bears will try to send XAGUSD to the upward-pointing trend line, currently at $24.74. So traders that have been waiting for a super cycle in silver prices need to wait a bit longer.

 

XAGUSD Daily Chart

 

Learn more about commodities investment or set up a demo account to kick start your trading journey now!