Silver Trying to Stay Bullish
25 August 2022
As the USD eased slightly on Thursday ahead of the Jackson Hole Symposium, precious metals caught some bids, pushing silver higher to 19.40 USD.
US macro update
According to the US Department of Labor's (DOL) weekly data released on Thursday, there were 243,000 new applications for unemployment benefits during the week ending August 20. This print exceeded the market forecast of 253,000 and followed the prior week's revised print of 245,000 (from 252,000).
Moreover, as per the second estimate released Thursday by the US Bureau of Economic Analysis (BEA), the US economy shrank at an annualized pace of 0.6% in the second quarter. This number exceeded the market expectation of -0.8% and was higher than the flash estimate of -0.9%.
"In the advance estimate, the decrease in real GDP was 0.9%," the BEA explained in its publication. "The update primarily reflects upward revisions to consumer spending and private inventory investment that were partly offset by a downward revision to residential fixed investment."
Facing major resistance
Silver is now trying to break above previous swing highs at 19.40 USD, proving to be a difficult task for bulls. However, if they are successful, we can see a quick relief rally toward the psychological 20 USD level.
On the other hand, if silver drops again, the support could be at the short-term uptrend line, currently near 18.85 USD. The metal might plunge toward the current cycle lows at 18.15 USD if it is not defended.