Silver Price Forecast: XAG/USD jumps to near $32.40 ahead of US NFP

• Silver price moves higher to near $32.40 as bond yields trade cautiously ahead of the US NFP data for January.
• Investors expect the US economy to have added 170K workers last month.
• Upbeat US labor market data would force traders to raise bets supporting the Fed to keep interest rates steady for longer.

Silver price (XAG/USD) climbs to near $32.40 in European trading hours on Friday. The white metal gains as the US Dollar (USD) and bond yields tick lower ahead of the United States (US) Nonfarm Payrolls (NFP) data for January, which will be published at 13:30 GMT.

Investors will focus on employment data to gauge the Federal Reserve’s (Fed) monetary policy outlook. On Thursday, Dallas Fed Bank President Lorie Logan said she would support holding interest rates at their current levels until the “labor market doesn’t falter.”

The US NFP report is expected to show that 170K fresh workers were added to the labor force in January, fewer than 256K in December. The Unemployment Rate is estimated to have remained steady at 4.1%. Signs of strong labor demand would boost market expectations that the Fed will keep interest rates in their current range of 4.25%- 4.50% for longer. Such a scenario would be unfavorable for the Silver price.

Investors will also focus on the Average Hourly Earnings data, which is a key measure of wage growth. On year, the wage growth measure is expected to have decelerated to 3.8% from 3.9% in December.

Ahead of the US NFP, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades subduedly around 107.70. 10-year US Treasury yields tick lower to near 4.43%.

Silver technical analysis

Silver price strives to break above the immediate resistance of $32.50, which is plotted from the December 9 high. The outlook of the white metal remains bullish as the 20-day Exponential Moving Average (EMA) is sloping higher near $30.90.

The 14-day Relative Strength Index (RSI) oscillates in the 60.00-80.00 range, suggesting that the momentum is bullish.

Looking down, the upward-sloping trendline from the August 8 low of $26.45 will be the key support for the Silver price around $29.50. While, the October 31 high of $33.90 will be the key barrier.

Silver daily chart