Silver Price Forecast: XAG/USD corrects $66.30 amid caution ahead of US NFP data

Silver price (XAG/USD) retreats to near $66.30 in the European trading session on Friday after posting a fresh five-day high near $68.00. The white metal comes under pressure ahead of the United States (US) Nonfarm Payrolls (NFP) data for August, which will be published at 12:30 GMT.

According to TD Securities, the US labour market is set for a partial recovery in August, with the bank forecasting that "August NFP [will] rebound to 95k after July posted a decline of 23k." The firm also expects limited movement in joblessness, noting that "the UE rate likely went sideways at 4.1% with balanced risks."

Investors will closely track the US NFP data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook. In TD’s view, a modestly hawkish employment report will reaffirm the Fed's attention on inflation, but it will be by itself unlikely to push the Committee towards hikes, suggesting that even a stronger print would not materially alter the current policy stance.

Meanwhile, traders have diminished Fed interest rate expectations after comments from Governor Christopher Waller on Thursday, in which he said that recent data shows signs of disinflation.

Analysts at Commerzbank also said that lingering uncertainty over the US rate outlook was “underscored yesterday by comments from Fed Governor Christopher Waller,” who, in their words, signalled that “a rate hike is by no means necessary.” They add that Waller “also confirmed what we have been arguing: next week’s inflation data are likely to be the key input for the Fed’s upcoming policy decision,” a shift in emphasis that, in their view, “further [reduces] the significance of today’s employment report.”

Silver Technical Analysis

In the daily chart, XAG/USD trades at $66.73, maintaining a bullish near-term bias as it holds above the 20-day exponential moving average (EMA) at roughly $65.71. The metal is advancing within an uptrend structure, with price comfortably supported by this short-term EMA, while the Relative Strength Index (RSI) around 55 suggests moderate bullish momentum without yet signaling overbought conditions.

On the downside, immediate support is seen at the 20-day EMA near $65.71, where a break would expose the white metal to a deeper correction. Looking up, the August high at $71.12 is the key hurdle.