Metals on the Move

The pull back in the US Dollar has benefited metals nicely. Silver prices are now up around 6% from last week’s lows. An agreement on the US debt ceiling has fuelled an unwinding of the USD safe-haven trade, allowing metals room to recover. Additionally, dovish comments from leading Fed members this week have fuelled a reversal in FOMC expectations. The market now projects the fed will hold rates unchanged when it meets this month. With USD looking vulnerable to a further drop lower near-term, silver prices have room to continue to advance from their current level.

Silver Shrugs Off Manufacturing Drop

Indeed, the current rally comes despite US manufacturing data yesterday showing a further drop in US factory activity. Industrial demand concerns have been a key issue for silver prices recently. However, it seems the bigger focus for now is on movements in USD.

NFP In Focus

Looking ahead today, the big focus will obviously be on the latest US labour market reports. With jobs set to have cooled from the prior month along with wages and the unemployment rate expected to tick higher, USD should continue lower into next week, again driving support for silver.

Technical Views

Silver

The rally in silver prices has seen the market trading back up to retest the 24.0073 level. This is a key price pivot for the metal and a break higher here will turn focus back onto a further push higher towards the 26.0974 level. With momentum studies turning higher, the outlook remains bullish near-term. To the downside, 22.3205 is the next support to note.