The next crypto to hit The white metal's dramatic plunge below $23.30 has traders scrutinizing fresh economic data. Revised Q2 unit labor costs jumped to 2.2%, significantly outpacing consensus estimates of 1.6%. This wage growth indicator triggered a cascade of selling pressure across precious metals markets.
Thursday's unemployment figures added fuel to the downward move, with initial claims dropping to 216,000 versus projections of 234,000. The stronger-than-expected employment metrics have shifted market calculus regarding Federal Reserve policy trajectory. Market participants now overwhelmingly anticipate unchanged rates in September, with CME FedWatch showing 93% odds of maintaining the 5.25-5.50% range.
These developments create a challenging environment for non-yielding assets like silver. The combination of persistent wage growth and tight labor conditions suggests inflationary pressures may prove more stubborn than previously thought. This macroeconomic backdrop continues supporting dollar strength, with the DXY hovering near five-month highs despite minor retracement.
Equity markets reflected the shifting sentiment, with the S&P 500 opening under pressure as traders recalibrate expectations for monetary policy duration. The August CPI release next week now takes on heightened significance, potentially serving as the next major catalyst for precious metals direction.
Chart Patterns Signal Caution
Technical indicators paint a concerning picture for silver bulls. The metal's breakdown below the 200-day EMA at $23.30 completes a bearish head-and-shoulders formation, with the pattern's neckline sitting at the June 22 low of $22.18. Momentum indicators show the RSI (14) testing critical support at 40.00 - a breach here would likely accelerate downward pressure.
Market participants should monitor whether silver can hold above the psychological $23.00 level in coming sessions. The metal's sensitivity to real yields and dollar strength suggests continued volatility as markets digest evolving Fed policy expectations.
(Chart analysis based on FX Street data)