XAG/USD in wait mode ahead of NFP above $25.00 and facing a potential bullish breakout
- Silver is in consolidation mode ahead of the US jobs report release as prices continue to fluctuate within their recent ranges of $24.80-$25.50.
- Technicians are eyeing bullish technical structures as the precious metal maintains an underlying supply for Ukraine-related developments.
Spot Silver (XAG/USD) is in its typical mode of consolidation ahead of the US jobs report release, as prices continue to fluctuate within their recent ranges of $24.80-$25.50 that have prevailed over the past few sessions. Right now, dips towards the $25.00 level are being bought while rallies towards previous week highs around $25.50 are being sold, and at the current levels of $25.20, XAG/USD is trading little changed on the day. Although the price action has been a bit more consolidative over the past few sessions, the technicals for silver still look very bullish.
Still, XAG/USD is trading just below multi-month highs and some have argued that it is forming an ascending triangle/pennant structure that could signal an upcoming uptrend. Risk appetite took another significant hit on Friday as European stocks fell amid fears that fighting in Ukraine could lead to a nuclear accident. Friday’s jobs report could well make the case for faster Fed tightening later in the year, which would typically be bullish for dollar and bond yields and bearish for silver.
But as global commodity prices continue to surge amid fears of supply disruptions in Russia, the underlying safe haven/inflation hedge bid supporting precious metals is unlikely to go anywhere any time soon. If XAG/USD can clear the $25.50 resistance to the upside in the coming sessions, it could open the door for a rally towards the July 2021 highs/early June 2021 lows in the $27.00 area.