Strong manufacturing PMI numbers create an upward trend for silver prices
- Silver prices are soaring for the second consecutive day.
- China, Eurozone, and Japan have recorded strong manufacturing PMI numbers.
- Silver's safe haven appeal is up amid the downward momentum of the U.S. dollar and stocks.
Silver prices are soaring for the 2nd consecutive day. As at 09:02 GMT, the precious metal was up by 2.14% to trade at $23.10. The market is reacting to the strong manufacturing PMI numbers from different markets. Besides, silver’s safe haven appeal has risen as the U.S. market indices and the dollar are on the decline.
Strong manufacturing PMI numbers cause silver to shine for the second day
Silver is an industrial metal used in manufacturing sectors worldwide. Some of its uses include the manufacturing of mirrors, solar panels, and kitchenware. The manufacturing PMI measures the performance of a country’s manufacturing industry. Higher-than-expected numbers indicate increased demand for manufactured goods; an aspect that results in the heightened demand for silver. Subsequently, investors looking to trade silver are keen on manufacturing PMI from the major silver consumers.
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To begin with, the market is reacting to China’s strong manufacturing PMI numbers. China is one of the largest consumers of this precious metal. As such, the stability of its economy is good news for silver prices.
On 30th November, the China Logistics Information Center indicated that the country’s manufacturing PMI was at 52.1. The figure was higher than the previous 51.4 and the forecasted 51.5.
Today, Markit has highlighted a similar trend. China’s Caixin manufacturing PMI rose to 54.9. The number is an upsurge from the previous month’s 53.6. Expert had forecasted the PMI to reach 53.5.
Japan’s manufacturing PMI has also surpassed expectations. It has risen to 49.0. Experts had forecasted that the number will remain unchanged at the previous 48.3. Despite the bullish trend in the two countries’ manufacturing sectors, some nations have recorded figures that are lower than expected.
India is another one of the large consumers of silver. However, its current manufacturing PMI is 56.3, down from the preceding month’s 58.9 and the forecasted 57.3. At the same time, Australia’s reading is 55.8. While it is below the expected 56.1, it is higher than the prior 54.2.
In Europe, the Spanish manufacturing PMI has fallen below expectations. It has reached 49.8 against the forecasted 50.5 and last month’s 52.5. Investors interested in buying silver are also keen on the manufacturing PMI numbers from other European countries such as Germany, France, and Italy. The market will also react to Markit’s data from the Eurozone, U.K., and the U.S. In the emerging markets, the focus will be on the readings from South Africa and Brazil.
Silver’s safe haven appeal is up
Just like gold, investors view silver as a hedge against the instability of fiat currencies. In today’s market, the price of the two precious metals is soaring. Investors have shifted to these safe havens amid the weakening of the U.S. dollar. Today, the dollar index was down by 0.23% to trade at $91.65. The U.S. market indices are also trading in the red. The Dow Jones has declined by 0.91%. similarly, NASDAQ and the S&P 500 are down by 0.06% and 0.46% respectively.