Silver recovers but remains range-bound below key resistance
Silver (XAG/USD) is trading above $61.30 during Monday’s early European session, having rebounded from two-month lows near $59.70 on Friday. The precious metal found some support from a slight retreat in US Treasury yields following the weaker-than-expected US labor data released on Friday. However, it remains below a critical resistance level at $62.40, maintaining the broader bearish trend.
The US Nonfarm Payrolls report for September showed a significant slowdown in employment creation and an unexpected rise in the Unemployment rate. These figures suggest that the Federal Reserve is likely to pause its monetary tightening cycle in October, which initially provided relief to precious metals. However, global borrowing costs are surging due to high oil prices, which could keep inflationary pressures elevated and limit the extent of US yields' retreat.
From a technical perspective, the $62.40 area, previously a support level, now acts as a key resistance. Silver’s recovery on Monday is mild, and momentum indicators in the 4-hour chart remain neutral. The Relative Strength Index (14) hovers around the 50 midline, while the Moving Average Convergence Divergence (MACD) is slightly positive. A break above $62.40 would need significant momentum, with the next resistance levels at $65.00 and $68.00. On the downside, support is seen at Friday’s low of $59.69, followed by the $56.60 area.