Silver Prices Stalled After Strong U.S. Jobs Report; Technical Analysis Highlights Key Support Levels

Date: May 3, 2025

By James Hyerczyk

Silver (XAG) has encountered significant resistance following the recent release of robust U.S. employment data, resulting in prices falling below crucial technical benchmarks. As investors reassess their expectations surrounding Federal Reserve interest rate cuts, the precious metal’s bullish momentum appears to be waning.

Silver Market Overview

On Friday, the price of silver concluded the trading day at $32.01, marking a decrease of $0.40, or 1.24 percent. The downturn follows positive job figures released from the U.S. labor market, which have shifted market dynamics and contributed to a bearish sentiment in the commodity sector.

Impact of U.S. Jobs Data

April’s nonfarm payrolls report revealed an addition of 177,000 jobs, significantly surpassing analysts’ forecasts. The unemployment rate remained steady at 4.2 percent, with hourly earnings lifting by 3.8 percent year-on-year. These statistics indicate a resilient labor market in the U.S., despite existing trade tensions, providing the Federal Reserve with less incentive to implement quick interest rate cuts.

In the aftermath of the report, traders adjusted their forecasts, notably diminishing the likelihood of a rate cut occurring in June. The market is now anticipating that any potential easing by the Fed may not materialize until July. This outlook contributed to an increase in U.S. Treasury yields, with the 10-year yield rising over 7 basis points to 4.308 percent and the 2-year yield moving up more than 12 basis points to 3.828 percent. Elevated yields negatively impact silver prices, as the metal does not provide a yield to investors during periods of rising or stable interest rates.

Trade Relations and Economic Sentiment

Despite escalating concerns over tariff disputes between the U.S. and China, the latter’s willingness to restart discussions provided some relief to market sentiment. The Chinese commerce ministry confirmed that the U.S. has initiated contact to renew tariff talks. However, significant progress remains contingent on the rollback of existing tariffs, which currently stand at 145% from the U.S. and 125% retaliatory tariffs from China. While this renewed diplomatic overture was received positively, it didn’t substantially alter outlooks on inflation or growth risks tied to tariffs.

Technical Analysis

From a technical perspective, silver is demonstrating bearish characteristics and is trading below its 50-day moving average, which is positioned at $32.63. Current trading ranges indicate that critical support levels lie between $31.09 and $31.00, with this zone gaining additional significance due to its proximity to the 200-day moving average. Should prices falter and breaching the $31.00 threshold occur, further downside pressure could see the market targeting $30.37. ## Future Market Outlook

Looking ahead, unless silver can regain its footing above the 50-day moving average, bearish momentum is likely to persist. The resilient labor market and postponed rate-cut expectations will continue to challenge the attractiveness of non-yielding assets like silver in the near term. While potential trade talks may offer some downside support, they are unlikely to facilitate a recovery without tangible commitments from both parties.

Market participants will be closely monitoring upcoming economic indicators and developments in trade negotiations, as these factors could shape the trajectory of silver prices in the weeks to come.

About the Analyst:

James Hyerczyk is a seasoned technical analyst and educator with over 40 years of experience in market analysis and trading. He specializes in chart patterns and price movements across various financial markets and has authored two books on technical analysis.

For more information and updates on market trends, please refer to our Economic Calendar and related articles.

This article is intended for educational and informational purposes only and does not constitute investment advice.

Share this article: