Silver stalled at a major downward trendline after a mixed U.S. jobs report nudged rate expectations lower. Traders now wait on the CPI print, with Wednesday's FOMC minutes the only near-term catalyst that could move the metal.
Silver extended its pullback into a major downward trendline after the U.S. non-farm payrolls report, where a slightly dovish repricing in rate expectations lifted the precious metals. The data was not bad, but it was enough to shift the odds. Chances of a July hike now stand at just 24%, while probabilities for a September move dropped to 55%.
Why the jobs miss mattered
The payrolls report broke silver loose in a single session. June payrolls came in at 57,000, roughly half of what the street expected, with downward revisions to prior months making it worse. Unemployment ticked down to 4.2%, and the market barely reacted to it.
Fed funds futures then repriced within hours. According to FXEmpire, July hike odds collapsed, September odds dropped sharply, the dollar posted its worst week in months, and Treasury yields broke lower across the curve.
Where silver sits now
On the daily chart, silver pulled all the way back to the major downward trendline. Sellers can be expected to step in there with defined risk above the line, while buyers want a break higher to target the 71.55 level next. FXEmpire frames the swing chart around the 52-week moving average at $63.47, a level that would signal more aggressive buying if reclaimed.
The next catalyst
With the Fed's focus on inflation, the U.S. CPI print will likely carry more weight than anything else on the calendar. For now, silver will likely stay rangebound at a higher level. Fed's Waller speaks today, but the FOMC meeting minutes on Wednesday are the only near-term event with enough weight to shift rate expectations, given the limited forward guidance from Fed Chair Warsh.
Sources: investingLive, FXEmpire
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