Silver (XAG/USD) maintained a firm footing near $62.00 during Thursday's European trading session, clinging to two-day gains as investors positioned ahead of Friday's critical US Nonfarm Payrolls (NFP) report for July and monitored ongoing geopolitical developments surrounding the Strait of Hormuz. The white metal found support from easing oil price pressures, which analysts suggest are helping to dampen global inflation expectations. Lower inflation expectations tend to reduce the likelihood of interest rate hikes by major central banks, a backdrop that broadly benefits non-yielding assets such as silver.
On the oil front, WTI crude was trading approximately 0.9% higher in European hours at around $75 per barrel, though it remained in proximity to its three-week low of $73.51 posted on Wednesday. ING analysts noted that ICE Brent continues to trade below $80 per barrel as markets price in the possibility of a deal between the United States and Iran that could resume energy flows through the Strait of Hormuz. According to ING, Iran has signalled progress toward this goal, announcing an agreement with Oman on new shipping arrangements for the strait, with a joint statement on the deal reportedly being prepared.
These developments have reinforced market expectations of a potential easing in supply-route tensions. Attention is now firmly focused on the US labor market. The July NFP data, due for release on Friday, is expected to have a significant impact on Federal Reserve interest rate expectations, particularly given that the central bank has ceased providing explicit forward guidance.
Preliminary labor market signals have been mixed to cautious. According to TD Securities, July ADP employment data surprised to the downside, moderating to 44,000 jobs, below TD Securities' own forecast of 50,000 and the broader market consensus of 65,000. The bank noted that while it does not place significant weight on the ADP report for month-on-month moves in NFP, the trend in the data aligns with their broader expectations.
TD Securities highlighted that both the monthly and weekly ADP readings have moderated through the summer, and they judge that a similar trend is likely to be reflected in the official NFP figures, consistent with their outlook for softer payrolls prints in the period ahead. From a technical standpoint, XAG/USD was trading at around $61.85, holding a bullish near-term bias as it remained above the 20-day exponential moving average (EMA) at $59.43, according to analysis published by FXStreet. The metal has reclaimed higher ground following a recent pullback, with its positioning above the short-term EMA suggesting underlying demand remains intact.
The Relative Strength Index (14) stood at 55.71, indicating mildly positive momentum while remaining clear of overbought territory. On the downside, initial support is seen at the 20-day EMA at $59.43, where a break would signal fading bullish pressure and potentially open the door toward the July 17 low at $54.77. To the upside, the July high at $63.28 represents the key near-term resistance level.
A clean break above that level could pave the way for an advance toward the June 22 high at $67.17. Source: FXStreet, authored by Sagar Dua. Technical analysis prepared with the assistance of an AI tool.
Source: fxstreet.com