Silver (XAG) Retreats from Six-Day High as Market Awaits US Jobless Claims Data

Silver (XAG) has pulled back from its recent six-day high of $32.70, trading near $32.30 as investors await the release of US Initial Jobless Claims data.

Silver (XAG) Rally Loses Steam After Breaking Key Resistance

Silver's impressive rally during the first week of March has hit a stumbling block as prices retreat from recent highs. After successfully breaking above the critical $32.50 resistance level on Wednesday, silver reached a six-day high of $32.70, showcasing strong bullish momentum. However, the European session on Thursday witnessed a reversal, with prices slipping below the $32.50 mark to trade near $32.30.

This pullback reinforces the significance of $32.50 as a key resistance level and raises questions about whether silver can maintain its upward trajectory for a fourth consecutive day. Despite gaining over 1% on Wednesday and extending its March rally past 3%, the precious metal now faces renewed pressure as market participants reassess its near-term outlook.

Technical Indicators Remain Supportive for Silver (XAG) Despite Pullback

Even with the recent retreat, silver's technical indicators continue to paint a positive picture for potential rebounds. The Relative Strength Index (RSI) on both daily and 4-hour charts remains firmly in bullish territory, suggesting that the underlying uptrend remains intact. This technical strength increases the likelihood that buyers may re-enter the market at these slightly lower levels.

The breakout above $31.90 earlier in the week has transformed this level into a support zone, providing a potential floor for prices should the current pullback extend further. This technical pattern of former resistance turning into support often signals continued bullish momentum once the market digests recent gains.

Global Trade Tensions Add Complexity to Silver (XAG) Market Outlook

Broader market factors are contributing to silver's complex trading environment, particularly escalating trade tensions between major economies. The United States has intensified trade disputes with Canada, Mexico, and China, imposing an additional 10% duty on Chinese imports, which brings the cumulative rate to 20%.

In response to these measures, Canada has implemented 25% tariffs on CAD 155 billion worth of U.S. goods, while China has introduced levies of 10%-15% on select American imports. Additionally, China has announced new export restrictions scheduled to take effect on March 10, further complicating the global trade landscape.

These developments have injected a significant degree of uncertainty into global markets, fueling concerns about potential economic slowdown and inflationary pressures. As a precious metal with both industrial and investment applications, silver is particularly sensitive to these macroeconomic shifts, which helps explain its recent price volatility.

Upcoming US Jobless Claims Data Could Determine Silver (XAG) Price Direction

Investors are now turning their attention to today's US Initial Jobless Claims report for insights into the Federal Reserve's potential policy direction. The labor market data will be closely scrutinized for any signs of cooling or strengthening in employment conditions, which could influence the Fed's interest rate decisions.

A stronger-than-expected jobs report would likely reinforce expectations of tighter monetary policy, potentially putting additional pressure on silver prices. Higher interest rates generally increase the opportunity cost of holding non-yielding assets like precious metals, making them less attractive to investors.

Conversely, weaker employment data could reignite safe-haven demand for silver, potentially pushing prices back above the $32.50 resistance level and increasing the probability of another upward move. In uncertain economic times, investors often turn to precious metals as a store of value, which could support silver prices despite other headwinds.

Silver (XAG) Price Trajectory Hinges on Key $32.50 Resistance Level

For the immediate future, silver's price trajectory appears to hinge on its ability to reclaim and sustain levels above the $32.50 resistance mark. A decisive break above this threshold would open the door for further gains, potentially testing recent highs and establishing a new trading range.

Failure to overcome this resistance level, however, could keep the metal range-bound or trigger further declines. Given the current market dynamics and mixed signals from both technical indicators and fundamental factors, traders and investors will need to closely monitor these key levels for clues about silver's next directional move.

The coming trading sessions will be crucial in determining whether silver can resume its upward momentum or if the current pullback marks the beginning of a more substantial correction. With global trade tensions and upcoming economic data adding layers of complexity to the market outlook, silver remains a focal point for precious metals investors seeking to navigate these uncertain times.