Silver Price Forecast: XAG/USD edges higher but remains on backfoot with US NFP in focus

• Silver price remains on edge as traders brace for the US NFP data for October.
• Lower US Initial Jobless Claims data signaled an improvement in job demand.
• The US Dollar resumes its upside journey after a corrective move.

Silver price (XAG/USD) adds little gains in European trading hours on Friday after plunging to near $32.50 on Thursday. The white metal faced sharp selling pressure after the release of the United States (US) Initial Jobless Claims data for the week ending October 25, which came in lowest in almost 22 weeks.

The US Department of Labor showed that individuals claiming jobless benefits for the first time were 216K, lower than estimates of 230K and the former reading of 228K. A slowdown in the jobless claims' growth pointed to an improving labor demand environment. On Wednesday, the ADP Employment Change data also showed a strong labor requirement in the private sector. The agency reported that 233K workers were hired by the private sector in October, significantly higher than 159K in September.

Meanwhile, the US Dollar Index (DXY), which gauges Greenback's value against six major currencies, rebounds strongly to 104.10 after a corrective move to 103.80. 10-year US Treasury yields climb to near 4.30%.

For more interest rate cues, investors await the US Nonfarm Payrolls (NFP) data for October, which will be published at 12:30 GMT. The NFP report is expected to show that the economy added 113K new workers, significantly less than 254K in September. Economists expect the Unemployment Rate to have remained steady at 4.1%. The NFP data will significantly influence market expectations for the Federal Reserve (Fed) interest rate cut path.

Silver technical analysis

Silver price extends its correction to near the key horizontal support plotted from the May 20 high of $32.50 on a daily timeframe. The white metal finds a temporary cushion near the 20-day Exponential Moving Average (EMA), which trades at around $32.80.

The 14-day Relative Strength Index (RSI) falls inside the 40.00-60.00 range, suggesting that a bullish momentum is over for now, however, the bullish trend remains intact.

Silver daily chart