How to exchange silver while Israel contemplates another attack on Iran? Key levels here | Market news

Data Summary:

US ISM services data (September) released on Thursday came in at 54.90, which beat the forecast of 51.70 by a wide margin. ISM Paid Prices rose to 59.40 (forecast 56) from 57.30 in August as ISM new service orders at 59.40 were well above the 52.50 forecast.

Although employment dipped into contraction territory, the ISM services report could be considered a robust one, which reduced the odds of 50 basis points at the next FOMC meeting. The weekly jobs report was mixed as weekly claims of 225,000 beat the forecast of 221,000, but continuous claims at 18,26,000 beat the estimate of 18,30,000.

Factory orders (August) came in at -0.20 percent versus the 0.20 percent forecast. Overall, the US data released on Thursday could be considered positive for the US economy and the US dollar index. US ADP (September) data released on Wednesday came in at 143,000, better than the 120,000 expected. Notably, JOLT (August) job openings, released on Tuesday, also beat the forecast. Eurozone services PMI (end September) was revised higher from 50.50 to 51.40 as even the composite PMI was better than the initial estimate.

US yields and the dollar index:

U.S. 10-year yields, at 3.83 percent, rose about 1 percent a day. The US dollar index was at 101.92, up 0.23%.

geopolitical clock:

The US president said he was discussing supporting Israel’s attack on Iran’s oil facilities in response to Iran’s attack on Israel using ballistic missiles. Iran earlier said it was done with its attack; however, Israel vowed strong retaliation to Iran’s attack. Iran has warned of strong action if Israel retaliates; thus, the worsening geopolitical situation has led to an increase in the geopolitical premium on silver prices.

Future dates:

The US non-farm payrolls report will be released today. The report is important as the Fed monitors the US labor market for signs of any alarming weaknesses. Thus, an unexpectedly weak report will increase the likelihood of a 50 bps cut at the next FOMC meeting, which will be positive for the metal. It is estimated that the non-farm payrolls report may throw a positive surprise.

ETFs and Inventory:

Total known holdings of silver ETFs worldwide were 721.178 MOz as of October 2. COMEX silver inventories were at 305.068 MOz on October 2nd, which is the highest level in almost 3 weeks.

The Perth Mint reported that sales of silver coins and bullion rose to 963,198 oz in September from 647,832 oz in August.

Silver Outlook:

The metal’s performance on Thursday was encouraging as it managed to rally despite lower gold and base metal prices. Its rebound faces resistance at $32.30 (Rs 93,500), a breach of which could help the metal test the next resistance at $32.77 (Rs 95,000), the cycle high.

Support is at $31.10 (Rs 90,000).

Today’s US non-farm payrolls report may induce huge volatility.

First publication: 04 October 2024 | 9:48 AM IST