Silver Price Forecast: XAG/USD struggled at $24.00, retraces gains despite a soft USD

• Silver price failed to gain traction, even though the US Dollar and US Treasury bond yields dropped.
• Latest US jobs data flashing that wages are aiming lower keeps traders hopeful for a Fed pivot.
• Silver Price Analysis: Bears mounted around $24.00, dragging prices towards the 20-DMA.

Silver price stumbles as Wall Street entered its last hour of trading on Monday after hitting a daily high of $24.09 but retraced those gains, albeit market sentiment remains positive as shown by US equities trading with solid gains. Therefore, the US Dollar (USD) weakened, bolstering dollar-denominated commodities. At the time of writing, XAG/USD is trading at $23.64, below its opening price by 0.64%.

Silver failed to capitalize on a soft US Dollar

Optimism surrounds worldwide investors as most global equity indices edged higher. China’s reopening and last week’s mixed economic data from the United States (US) were some of the reasons that weighed on the greenback, alongside growing speculations that the US Federal Reserve (Fed) might pivot.

Last week’s employment data showed the US labor market resilient, adding more jobs than estimated. Still, the data spotlight was Average Hourly Earnings, which dropped to 4.6% YoY, below the previous month’s 5%. That eased some of the Federal Reserve’s (Fed) pressures to curb inflation and even opened the door for a 25 bp rate increase for February 1, as shown by the swaps market.

Therefore, traders are repricing a less hawkish Fed, as shown by the US bond market. The US 10-year Treasury bond rate yields 3.53%, losing three and a half bps, undermining the greenback. The US Dollar Index, which measures the buck’s value against a basket of six currencies, edges lower by 0.71%, down at 103.171.

Silver Price Analysis: Technical outlook

From a daily chart perspective, XAG/USD remains upward biased, with prices trending above the 20 and 50-day Exponential Moving Averages (EMAs), which remain as a support level. Last Friday’s price action formed a bullish engulfing candle pattern, which is usually a bullish pattern. However, XAG/USD failure to hold to its gains above Friday’s $23.90 daily high, and oscillators aimed lower capped silver rally.

Therefore, the XAG/USD first support would be the 20- day EMA at 23.48. Break below will expose the last week’s low of $23.12, followed by the $23.00 figure.