Silver Price Analysis: Skate the XAG/USD bid on US Nonfarm Payrolls – TDS
06.12.2023, 07:47

Silver Price Analysis: Skate the XAG/USD bid on US Nonfarm Payrolls – TDS

Commodity Strategists at TD Securities (TDS) explained their strategy for trading Silver price heading into Friday’s critical US Nonfarm Payrolls release.

Key quotes

"Buying exhaustion in precious metals has morphed into selling activity at a faster pace than initially anticipated, sending active Silver prices towards our target nearly -5% lower.

In fact, our advanced positioning analytics now already suggest that algorithmic trend followers have liquidated the bulk of their net long position, contributing to the downside in prices over the last sessions.

However, the scope for subsequent CTA selling activity is still elevated, with a break in active silver prices below the $23.90/oz range likely to spark notable short acquisitions.

We expect an upside surprise in this week's non-farm payrolls data that could roil rates market pricing for the Fed to begin its cutting cycle as soon as March, extending the slide lower in precious metals with discretionary traders now net long.

While we expect macro headwinds to weigh on precious metals short positions in the medium term, we skate our bid to extend our target towards $22.50/oz and slide our stop towards $25.35/oz (50% retracement) to protect profits on this tactical position. Given that gold prices had led the move higher in precious metals, our trading target at $1950/oz remains in play."

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