- The price of silver is still directionless amid the lack of US Level 1 economic data.
- Sentiment is fragile on heightened fears of a recession as the BoE admits the UK could benefit.
- Initial jobless claims in the United States could be a prelude to Friday’s NFP, which is expected to add 250,000 jobs.
The price of silver climbs for two straight days, posting gains of 0.51%, as US stocks end mixed, while Asian stock futures fluctuate as fears of recession reignite, thanks at the Bank of England. That said, alongside a weak US dollar, supported by falling US Treasury yields, supported the white metal on Thursday. At the time of writing, XAGUSD is trading at $20.14.
Silver is trading in a range, waiting for a catalyst
The story of the day is the BoE’s 50bp rate hike, but acknowledged that the UK could benefit from a 15-month recession, from the end of the fourth quarter of 2022. Meanwhile , in the United States, the inversion of the 2s-10s yield curve has deepened further, stands at -0.357% and has extended to 23 days, while the benchmark US 10-year rate has declined five basis points to 2.694%.
Inversion of the US yield curve 2s-10s
In terms of data, the US calendar had initial jobless claims for the week ending July 30, which rose by 260,000, more than expected, showing signs that the labor market is easing. At the same time, the US trade balance narrowed its deficit from -$80.1B in May to -$79.6B in June, driven by exports.
Meanwhile, the US Dollar Index, an indicator of the value of the dollar against a basket of peers, fell 0.58% to 105.700, accumulating losses from the YTD peak of 3.8%, tailwinds for dollar-denominated XAGUSD.
Late in the day, the Fed, led by Fed Loretta Mester of Cleveland, reiterated that there was a path for a soft landing, but acknowledged that recession fears had increased, adding fuel to confirmed uncertainty. by the UK, the persistent recession worldwide.
Moving on to geopolitical concerns, tensions between the United States and China persist. In response to US President Nancy Pelosi’s trip to Taiwan, China fired missiles over Taiwan during military exercises, while Japan complained that five such missiles landed in the exclusive economic zone. from Japan. US National Security spokesman John Kirby said “China has chosen to overreact,” but added that it is using the visit to increase military activity around Taiwan.
These games, amid the mood of the market, will keep the price of silver fluctuating. Nonetheless, it looks like the buyers don’t have the strength to break XAGUSD’s 50-day EMA at $20.39.
What to watch
The U.S. Economic Register will show July’s nonfarm payrolls estimated at 250,000, down from June’s 372,000. At the same time, the unemployment rate is expected to remain unchanged at 3.6%.
Silver (XAGUSD) Major Technical Levels