XAG/USD is on the backfoot mid-$24.00 as US yields/dollar surges pre-NFP higher
- US yields and the dollar are slightly higher pre-NFP and this is keeping silver prices on the heels.
- Spot prices continue to see selling pressure at the $25.00 level with recent Russian-Ukrainian comment on the upside.
- If US data is resilient, XAG/USD could be pushed back towards weekly lows in the $24.00 area.
While US yields strayed from previous session highs, they recovered somewhat on Friday ahead of the release of the official US jobs report for March at 1330 BST, followed by the release of the US ISM manufacturing PMI survey in March follows 1500BST. This, coupled with a slight sustained recovery in the US dollar that has propelled the DXY higher into the 98.50 area, weighs slightly on silver. Spot prices (XAG/USD) are trading around 0.5% lower in the $24.60 area on the day. Remarkably, the USD 25.00 a troy ounce mark has acted as solid resistance since Tuesday.
This week’s US data so far (JOLTs, ADP, Initial Jobless Claims, Core PCE) have all been resilient and support the notion that the US economy remains strong, with a tight labor market and elevated inflation. The upcoming data on Friday should continue to signal this, meaning US yields and the US dollar are likely to remain supported near recent highs. This suggests that the prospect of a break above $25.00 on Friday is not great, especially given Russian Foreign Minister Sergei Lavrov’s recent positive comments on the Russian-Ukrainian peace talks.
Talks between the two warring countries resume on Friday, meaning geopolitics will remain the focus. Any signs that further progress is being made towards a peace deal, combined with what is likely to be more robust US economic data, could weigh on XAG/USD. Short-term bears will eye a possible retest of the weekly lows in the $24.00 area where the 200-day moving average sits.