TradingKey – As of the European session today (June 10), silver has continued its weak downward trend, hitting an intraday low of $63.44. Technical analysis suggests that silver prices may continue to decline in the short term. Due to strong U.S. non-farm payroll data and the conflict between Iran and Israel, silver prices ( XAGUSD) have continued to fall recently, with a cumulative decline of over 13% this month.
From a fundamental perspective, the primary driver behind the recent decline in silver prices is the U.S. non-farm payroll (NFP) data. In May, non-farm payrolls increased by 172,000, while the unemployment rate remained at 4.3%. This data was significantly stronger than market expectations, suggesting that the U.S. labor market has not deteriorated rapidly and remains resilient.
For the Federal Reserve, robust employment implies there is no urgent need for interest rate cuts in the near term. For non-interest-bearing assets like silver, the interest rate environment is particularly critical. When the market expects the Fed to maintain high rates for longer, or even sustain a hawkish stance amid fluctuating inflation, the opportunity cost of holding silver rises, leading capital to flow toward yield-bearing assets such as the U.S. dollar and Treasuries.
This is also a significant reason for silver’s substantial recent decline. Silver possesses attributes of both precious and industrial metals, and its price elasticity is typically higher than that of gold. When the dollar strengthens and real interest rates rise, silver often experiences amplified downward movements. The strong NFP data reinforced the view that the U.S. economy remains resilient and that rate-cut expectations continue to cool, leaving silver’s rebound without sufficient macro support.
It is worth noting that following the release of the U.S. May NFP data, market focus has shifted to the U.S. May CPI data scheduled for release today. Since the previous NFP data has already underscored economic resilience, this CPI reading will directly influence market assessments of the Federal Reserve’s policy path.
If the CPI exceeds expectations—particularly if the month-on-month core CPI remains strong—the market may further bet on the Fed maintaining high interest rates for longer. Consequently, the dollar and Treasury yields would likely continue to strengthen, putting further pressure on silver. In such a scenario, silver prices could continue to move lower to test previous support levels.
Conversely, if the CPI is lower than expected, indicating that inflationary pressures have eased, expectations for rate cuts within the year may heat up again. Should the dollar and Treasury yields pull back, silver could see an opportunity for an oversold rebound. However, given the strong NFP data and ongoing instability in U.S.-Iran relations, silver might not immediately resume a unilateral rally even if the CPI is slightly below expectations; a technical correction is more likely.
Silver Price Weekly Chart. Source: TradingView
Based on the weekly chart for silver, the progressively lower highs of the candlesticks indicate that overall market sentiment leans bearish. Furthermore, the SMA10 has crossed below the SMA20 to form a death cross, which further bolsters bearish momentum and suggests the short-term decline may continue. However, the medium-to-long-term SMA60 and SMA144 maintain a bullish alignment, signifying that the long-term uptrend for silver remains intact.
Currently, the primary downside target for silver is a test of the 0.786 Fibonacci retracement level at $62.00. If this level fails to hold, silver prices may pull back further toward the weekly SMA60 support near $58.00.
Notably, if this week’s closing price remains firm above $62.00, silver will see a technical corrective rally, with the first target potentially testing the $67.80 resistance level. Conversely, if the closing price falls below $62.00, the downside potential toward the $52.00 support level will be opened.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.