Silver Prices In a Slight Uptrend After Payrolls Data Miss Expectations

Private payrolls data missed its expectations, which caused a slight uptrend for silver. It remains to be seen whether the precious metal can break out of a year-to-date funk.

The Bloomberg Silver Subindex is down about 9% for the year, but silver could have more catalysts up ahead for the rest of 2021. A rising number of COVID cases due to the Delta variant could help spur a move to safe haven metals like sliver.

“U.S. companies created much fewer jobs than expected in August as the Covid resurgence coincided with cutbacks in hiring, according to a report Wednesday from payroll services firm ADP,” a CNBC report said. “Private payrolls rose just 374,000 for the month, well below the Dow Jones estimate of 600,000 though above July’s 326,000, which was revised downward slightly from initial 330,000 reading.”

^BAGS Chart

^BAGS data by YCharts

Looking at the technical chart, the index’s 50-day moving average has fallen below its 200-day moving average to indicate short-term weakness to come. Furthermore, the relative strength index (RSI) is right in the middle of overbought and oversold levels, indicating that a possible holding pattern could continue.

Positive signs for silver might not be near-term technicals, but fundamentally, silver demand in the industrial sector could buoy the precious metal. According to a Kitco News report, commodity analysts at Metal Focus are bullish on silver.

“In our view, however, we have retained our positive outlook for silver industrial demand, both this year and looking further ahead, even if the global economy does face several headwinds,” the analysts said.

^BAGS Chart

^BAGS data by YCharts

An ETF to Play Silver

Investors looking to get silver exposure without having to hold the metal itself physically can look to ETFs. One particular fund to consider is the Sprott Physical Silver Trust (PSLV).

PSLV primarily invests in physical silver bullion in the London Good Delivery bar form. Sprott Physical Silver Trust was formed on June 30, 2010, and is domiciled in Canada.

“December silver prices hit a three-week high today,” a Kitco News article said. “The silver bears have the slight overall near-term technical advantage. However, prices are now in a fledgling uptrend. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $25.00 an ounce.”

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