Silver Price Forecast: Falls to $24.31 After NFP, Eyes on Upcoming CPI and Bond Auctions

Silver‘s recent weekly downturn, with a 5.11% decline to close at $24.31, was significantly influenced by the latest US Non-Farm Payrolls (NFP) data. The NFP showed a substantial increase in employment with 275K jobs added, exceeding the anticipated 198K, yet the Average Hourly Earnings growth slowed to 0.1% from a previous 0.5%, and the Unemployment Rate ticked up to 3.9% from the expected 3.7%.

Looking ahead, the upcoming week is loaded with pivotal economic events that could sway silver prices. On Tuesday, March 12, investors will eye the Core Consumer Price Index (CPI) month-on-month, expected at 0.3% versus the previous 0.4%, and the CPI month-on-month forecasted at 0.4%, aligned with prior readings.

Year-over-year CPI is anticipated to remain at 3.1%. That day will also see the 10-year Bond Auction, with yields benchmarked at 4.09, providing insights into investor sentiment towards long-term interest rates.

Subsequent to this, on Wednesday, March 13, the focus shifts to the 30-year Bond Auction, where a yield of 4.36 will be scrutinized for future interest rate directions.

On Thursday, March 14, the agenda includes Core Producer Price Index (PPI) month-on-month expected at 0.2% against a prior 0.5%, and Retail Sales month-on-month predicted to rebound to 0.8% from a disappointing -0.8%. Unemployment Claims are forecasted slightly up at 218K from 217K.

The week concludes on Friday, March 15, with key releases such as the Empire State Manufacturing Index, anticipated at -7.6 from -2.4, and Preliminary University of Michigan Consumer Sentiment expected marginally higher at 77.3% from 76.9%. Also, Preliminary University of Michigan Inflation Expectations are pegged at 3.0%.

These figures and events will be instrumental in shaping silver’s market dynamics, offering a blend of inflationary expectations, consumer sentiment, and employment trends that will guide investor strategies in the silver market amidst a backdrop of economic recalibration and monetary policy anticipation.

Silver’s pivot point holds at $24.62 emerging as a critical indicator of future price direction. Resistance levels, identified at $25.08, $25.49, and $25.92, set the stage for potential challenges to upward price momentum.

Conversely, support levels rooted in Fibonacci retracement levels at $24.07424 (23.6%), $23.72069 (38.2%), and $23.43448 (50%) offer a glimpse into pivotal zones that could attract buying interest.

The technical outlook is further refined by the Relative Strength Index (RSI) standing at 66, pointing towards a market that is nearing overbought conditions, albeit without a definitive confirmation yet. The 50-Day Exponential Moving Average (EMA) at $23.14 reinforces the underlying strength in the market, despite recent pressures.

The presence of a doji candlestick pattern just below the pivot point suggests a potential shift in market sentiment. This formation, indicative of market indecision, hints at a possible correction or initiation of a bearish trend, with immediate targets around the 23.6% Fibonacci level at approximately $24.

Conclusively, the current market sentiment for silver is cautiously bearish below the $24.62 mark. A decisive move above this level could alter the landscape, introducing a more bullish inclination.