Silver Price Forecast: XAG/USD extends gains as US Dollar falls further, NFP comes into focus

Silver price (XAG/USD) extends its Wednesday recovery move on Thursday, trading 0.67% higher at around $65.70 during the European trading session. The white metal strengthens as the US Dollar (USD) declines further due to moderate job demand in the United States (US) private sector.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades close to Wednesday’s low near 99.45.

On Wednesday, the US ADP reported that the private sector created 38K fresh jobs in August, fewer than 47K estimates and the prior release of 46K. This has created an unfavorable backdrop for the Nonfarm Payrolls (NFP) data for August, which will be published on Friday.

Technically, a lower US Dollar makes the Silver price a favorable risk-reward bet for investors.

Meanwhile, a pause in the rally in US Treasury Yields has also offered some support to non-yielding assets, such as Silver.

10-year US Treasury Yields have corrected to near 4.77% after posting a fresh high of 4.82%, a level last seen in October 2023.

Silver Technical Analysis

In the daily chart, XAG/USD trades at $65.92. The pair holds above the 20-day Exponential Moving Average (EMA) at $65.50, which suggests a constructive near-term bias as price continues to respect trend support.

The Relative Strength Index (14) at 52.85 sits in neutral-to-positive territory, hinting that bullish momentum is present but not overstretched after the latest advance.

On the downside, immediate support emerges at the 20-day EMA at $65.50, where buyers are likely to defend the ongoing upswing if a pullback unfolds. Looking up, the August high at $71.12 is the key resistance zone.