Silver Price Slumps As US Private Sector Adds Nearly a Million Jobs in May

The U.S. Dollar picked up strength on Thursday after a double dose of stellar employment data hit the markets. 

Data from Automated Data Processing Inc (ADP) showed that private-sector hiring rose by 978K, beating the consensus of 645K and also exceeding the 654K jobs added in April. 

Furthermore, initial jobless claims fell below 400K for the first time since the coronavirus pandemic struck in March 2020, with first-time jobless benefit claims falling from 405K to 385K.

The U.S. Federal Reserve has consistently mentioned improvement in U.S. labour market conditions as one of the factors it will consider when deciding on tapering the Q.E. program or raising interest rates. 

The figures could put the Fed under pressure to start talking about tapering, especially if Friday’s NFP goes in the same direction as the ADP Employment Change. 

Commodities took a hit from the data, with gold, silver, and copper all shedding weight. Silver prices on the XAG/USD chart are currently trading at more than 3.2% lower.

Technical Levels to Watch

Thursday’s slide in silver prices has broken down the channel and violated the 27.502 support level by a mile. If prices are to end the day at this level, the capitulation of 27.50 will be confirmed, opening the pathway towards 26.86. Additional targets at 26.62, 26.32, and 26.03 come alive if the corrective decline continues well below 26.86. 

Bulls would be looking at potential dip-buying opportunities on the flip side, with any of the price levels mentioned above all serving as likely candidates. A bounce will ultimately need to breach 28.07 and 28.35 to target the 2 February high at 29.03, with the 2021 high registered at 30.09 on 1 February looking a bit far off for now.

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XAG/USD Daily Chart

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