Silver price seems ripe for its next target at $24.50
- Silver price is trading steadily above $24 as bulls eye the next target at $24.50.
- Industrial output data from China is lower-than-expected but Japan's figures have beat experts' estimates.
- Consumer confidence numbers later in Tuesday's session will likely impact silver price.
Silver price is holding steady above the crucial support level of $24. Mixed industrial output data and a declining US dollar are the key drivers in Tuesday’s session.
Silver price is reacting to the industrial output data released earlier on Tuesday. To begin with, preliminary data on industrial production in Japan showed a lower-than-expected decline. After the recorded surge of 6.5% in June, analysts expected a reading of -2.5% in July.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
However, industrial production in the third-largest economy declined at a lower pace of 1.5%. According to the country’s Ministry of Economy, Trade and Industry, industrial production in August is forecasted to rise by 3.4% compared to the prior decline of 1.1%.
At the same time, China’s manufacturing PMI came in lower-than-expected at 50.1. Analysts had forecasted a reading of 50.2 compared to July’s 50.4. Notably, it is the second consecutive month that the country’s industrial output has missed the experts’ estimates. However, it remains above 50, which represents an expansion of the country’s manufacturing sector.
The declining value of the greenback has further boosted silver price. The dollar index has extended Monday’s losses to find support at $92.50. The lower-than-expected US pending home sales, which were released on Monday, weighed on the greenback while boosting the value of precious metals. According to the National Association of Realtors, the sales dropped by 1.8% in July compared to the forecasted rise of 0.4%.
Later in the session, the precious metal will be reacting to the US consumer confidence numbers. A higher-than-expected figure will be bullish for the greenback and may curb silver’s gains. Experts have predicted a reading of 124.0, which is lower than July’s 129.1.
Silver price technical outlook
Silver price is trading steadily above the crucial support level of 24 after hovering around it in the previous session. At the time of writing, it was up by 0.45% at 24.14.
On a three-hour chart, it is trading above the 25 and 50-day exponential moving averages. Based on both the fundamentals and technical, I expect the precious metal to record further gains in the ensuing sessions.
In the immediate term, it will likely rise to find resistance at 24.25. Above that level, the bulls will be targeting August’s support-turn-resistance level of 24.50. On the flip side, it may pull back to along the 25-day EMA at 23.89 before bouncing back to above 24.