Silver Price Forecast: XAG/USD recovers above $50 while investors await US NFP data

• Silver price turns slightly positive to near $50.30 after recovering early losses.
• The probability of the Fed cutting interest rates in December has diminished to 43%.
• Investors await the US NFP data for fresh cues on the labor market outlook.

Silver price (XAG/USD) claws back its early losses and turns slightly positive to near $50.30 during the European trading session on Tuesday. The white metal attracts bids as investors turn cautious ahead of the United States (US) Nonfarm Payrolls (NFP) data for September, which will be releasing on Thursday.

Investors await the US NFP data to get fresh cues on the current status of the labor market. Financial market participants lack information regarding the job market status as major economic releases were halted in last almost seven weeks due to federal shutdown.

Meanwhile, the market sentiment remains risk-averse amid receding speculation favoring further interest rate cuts by the Federal Reserve (Fed) this year. At the press time, S&P 500 futures trade 0.25% lower, exhibiting a risk-off mood.

According to the CME FedWatch tool, the probability of the Fed to cut interest rates by 25 basis points (bps) to 3.50%-3.75% in the December meeting has diminished to 43% from 62.4% seen a week ago.

Technically, the scenario of easing Fed dovish bets is unfavourable for the Silver price, given that a pause in the Fed's monetary easing campaign bodes poorly for non-yielding assets.

Silver technical analysis

Silver price finds cushion after correcting to near the 20-day Exponential Moving Average (EMA) around $49.70.

The 14-day Relative Strength Index (RSI) returns inside the 40.00-60.00 range, suggesting indecisiveness among investors about the near-term outlook.

Looking down, the September 23 high of $44.47 would remain a key support. On the upside, the all-time high of $54.50 might act as key barrier.

Silver daily chart