Strong US Data Hits Silver Prices
Silver prices hovered around US$57.40 per troy ounce on Monday (August 3), down approximately 0.4% from the previous close. The XAG/USD pair experienced significant fluctuations within the US$56.57–US$58.65 range, reflecting high volatility following the release of US economic data.
Downward pressure emerged after the US ISM Manufacturing PMI surged to 55.6 in July—up from 53.3 in June and surpassing the forecast of 54.0. This figure marked the highest level since May 2022 and indicated that manufacturing activity has expanded for seven consecutive months.
The employment component also strengthened, rising to 52.8 from 49.7, signaling that manufacturers are once again adding workers. Meanwhile, the price index fell to 71.1 from 73.0, though it still indicated rapidly rising raw material costs and persistent inflationary pressure.
Robust economic data gives the Federal Reserve more leeway to maintain high interest rates or tighten policy further. This environment weighs on silver; as a non-yielding asset, its appeal diminishes when the yields on interest-bearing assets rise.
However, silver's decline was tempered by a defensive US dollar and Treasury yields that had previously dropped to around 4.69%. A fall in oil prices—driven by hopes for US-Iran diplomacy—helped ease inflation concerns, thereby limiting expectations of overly aggressive Fed tightening.
Newsmaker Analysis: Silver remains vulnerable to downward pressure as long as it stays below the US$58.00–US$58.65 range. The US$57.00 level serves as initial support, followed by US$56.55. While strong manufacturing data is ultimately positive for industrial silver demand in the medium term, concerns regarding high interest rates remain the dominant driver in the short term. (arl)
Source: Newsmaker.id
