SLV ETF analysis: What next as silver prices hit an all-time high?

Silver price soared to a record high in reaction to the released US jobs data. According to the Bureau of Labor Statistics, nonfarm payrolls exceeded expectations in November but declined in the previous month.

Financial markets have been eyeing crucial economic data and how they influence the Fed’s policy in coming months. However, November’s figures did not yield the expected volatility in Treasury yields, the US dollar, and silver price. 

Silver price hits an all-time high after NFP data

After the December Fed meeting that had the US central bank cut interest rates by 25 basis points, investors have been eyeing cues on its next move from crucial inflation and jobs data. Ordinarily, signs of a weakening US labour market bolster silver’s safe-haven appeal while weighing on the US dollar.

According to the released figures, the unemployment rate exceeded expectations by rising to 4.6%; its highest level since September 2021. At the same time, October marked the third out of the past six months that nonfarm payrolls have recorded a decline.   

While the numbers painted a picture of a jobs recession, the market reacted sparingly. This is largely due to the data disruptions caused by the recent US government shutdown. 

December’s jobs data, slated for release before the Fed’s January meeting may be a more meaningful indicator on the central bank’s next move. Even so, the employment figures solidified assertions by the Fed officials that the job market isn’t really a source of inflation. Investors now await the US CPI figures slated for release on Thursday.

SLV ETF stock technical analysis

SLV ETF chart | Source: TradingView

The SLV silver ETF eased slightly on Tuesday after refreshing its all-time high late last week. At the time of writing, it was trading at $58.11; less than a dollar below the record high at $58.61. 

In addition to the fundamentals, a look at its daily chart indicates that the uptrend is still steady, as it continues to trade above its short-term 25-day EMA and the medium-term 50-day MA. Besides, the asset has found solid support along the main bullish trendline that has been in place since August, and the minor one that has been steady for about three weeks now.  

Nonetheless, its entry into the overbought zone points to a healthy correction in the near term. It has been under these conditions for a week now with its RSI currently at 74. 

Based on these technical indicators, SLV silver price may ease to the resistance-turned-support zone of $55 as the bulls gather enough momentum to rally to fresh levels of $60. A further correction may activate the lower support at $53.29. However, for as long as it holds steady above the 25-day EMA at $51, this bullish thesis remains valid. 

Even with the expected pullback, I expect some gains along the way. A decline in SLV silver price is set to attract buyers looking for exposure in the white metal’s steady uptrend.