Silver Price Forecast: XAG/USD clings to gains near $62 with US NFP in focus

Silver price (XAG/USD) maintained modest gains near $62.00 during the European trading session on Thursday, as traders kept a close eye on the US Nonfarm Payrolls (NFP) data scheduled for release on Friday. Oil prices, specifically WTI, demonstrated a slight increase of 0.9% to around $75, but are near their three-week low of $73.51.

Lower oil prices contribute to stable global inflation expectations, which reduces concerns about central banks raising interest rates - a favorable environment for non-yielding assets like Silver.

Analysis from ING highlights the potential for progress in negotiations between the United States and Iran, which could ease tensions in energy flows through the Strait of Hormuz. This development is expected to have a positive impact on Silver price expectations. Meanwhile, investors remain focused on the upcoming US NFP data, as it has the potential to significantly influence the Federal Reserve's (Fed) interest rate expectations.

TD Securities stated that the July ADP employment data was lower than anticipated, at 44k, which may signal a cooling job market after its strong start to the year. However, the bank still considers trend analysis in the data to have merit, anticipating similar moderation in future NFP releases.

Currently, XAG/USD trades near $61.85, retaining a bullish short-term outlook, as it remains above the 20-day exponential moving average (EMA) at $59.43. The metal has regained higher ground after its recent pullback, with the positioning over the short-term EMA suggesting that demand remains in place. Momentum, as indicated by the Relative Strength Index (14) at 55.71, indicates that buyers are in the lead without overbought conditions.

If the 20-day EMA support at $59.43 breaks, it could signal weakening bullish pressure, potentially leading to a return to the July 17 low of $54.77. On the upside, the July high of $63.28 is the primary hurdle for Silver, with an upward move potentially extending the advance towards the June 22 high of $67.17. Silver is a versatile commodity that can be traded in various forms, such as physical metals or through Exchange Traded Funds, but its price fluctuates due to factors including geopolitical events, interest rates, the US Dollar's strength, investment demand, mining supply, and recycling rates.