Silver spot price edges up despite strong US factory data

on Dec 16, 2013
Updated: Oct 21, 2019
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**iNVEZZ.com, Monday 16 December:**

The spot price of silver has today climbed higher than its Friday close of 19.68, propelled by a stronger-than-expected US Factory Output report and disappointing US manufacturing data. While that may appear contradictory at first-sight, it’s indicative of a wider lack direction ahead of this week’s main event – the final monetary policy meeting for the year of the US Federal Reserve. Market makers might therefore just be hunting for stops pending an FOMC announcement at the close of its meeting Wednesday on whether it’s to launch tapering now or not.

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Silver had been declining up until the New York morning bell, at which point the Empire State Manufacturing Index for December checked in short of analyst estimates and rekindled the precious metal’s admirers.
The US Flash Manufacturing PMI followed with a slight deterioration to 54.4 this month from November’s 54.7 and undershooting the market consensus for improvement to 54.9. Notably though, the survey’s employment component rose to its highest level since March. In addition, the monthly average for the fourth quarter shows that the US manufacturing sector has enjoyed its best performance since the start of the year.

Markit’s chief economist Chris Williamson noted that the PMI data fell just short of the November reading, “which had been buoyed by a rebound after a disrupted October”.
In Williamson’s view, “the survey is yet another indication that the U.S. economy has shown greater than expected resilience to the headwinds of the uncertainty caused by the government shutdown and debt crisis, and will add to the likelihood of the Fed tapering its huge stimulus of $85bn per month asset purchases sooner rather than later”.

The Federal Reserve’s Factory Output report for November also showed unexpected levels of robustness in the US economy, with the Capacity Utilization Rate rising to a nine-month high of 79.0 percent, beating expectations for a rise to 78.5 percent from October’s 78.2. The icing on the cake came from a 1.1 percent increase m/m November’s Industrial Production, nearly double the expected rise of 0.6 percent, with the prior reading also revised up, from negative 0.1 percent to positive 0.1 percent.
Currently the spot price of silver is back at 19.69, just one cent up on Friday’s close.
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