- Silver price retraces to near $58.00 as the two-week long rally hits pause.
- Firm Fed dovish expectations to keep the Silver price broadly on the frontfoot.
- The US private sector data showed that the laborforce was reduced by 32K in November.
Silver price (XAG/USD) trades 0.8% lower to near $58.00 during the late Asian trading session on Thursday from its all-time high around $59.00 posted on Wednesday. The white metal corrects as the two-week rally hits pause, while the outlook remains firm as traders are increasingly confident that the Federal Reserve (Fed) will cut interest rates in its monetary policy meeting on Wednesday.
Lower interest rates by the Fed bode well for non-yielding assets, such as Silver.
According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 25 basis points (bps) to 3.50%-3.75% in the December policy meeting is 89%.
Fed dovish speculation remains intensified as United States (US) labour market conditions seem to be deteriorating further. The US ADP Employment Change data showed on Wednesday that 32K employees were laid-off in November, while economists anticipated addition of 5k fresh workers.
Weakening US labour demand has also weighed on the US Dollar (USD). During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, struggles to hold its fresh monthly low of 98.80 posted on Wednesday.
Silver technical analysis
In the daily chart, XAG/USD trades around $58.00 during late Asian trading hours. Price holds well above the rising 20-day Exponential Moving Average (EMA) at $53.61, keeping the short-term uptrend intact. The 20-day EMA has been climbing steadily, reflecting persistent buying interest.
RSI at 71.61 is still overbought after pulling back from 75.41, which could curb immediate upside as momentum cools. The moving average underpins the downside, with dips expected to attract buyers.
Trend momentum remains firm as the 20-day EMA slope continues to steepen. A pause to digest gains would reduce overbought pressure and would keep the bias positive if price stays above the average. RSI above 70 confirms strong momentum and a potential pullback would be viewed as corrective. Overall, continuation would stay favored as long as daily closes hold above the 20-day EMA.
