- Silver price remains stable ahead of US PMI data due on Wednesday.
- The slowdown in the Chinese economy could negatively impact industrial demand for Silver.
- Safe haven La Plata could struggle due to rising optimism about a possible cessation of hostilities in the Middle East.
Silver (XAG/USD) price is holding above $29.00 per troy ounce during the European session on Wednesday. The price of the grey metal is struggling to continue its gains as investors await a slew of key US economic data that could shed light on the path of the Federal Reserve’s monetary policy.
US Purchasing Managers’ Index (PMI) data is scheduled for release later in the American session. In addition, attention will focus on the annualized second-quarter Gross Domestic Product (GDP) figures, due on Thursday, and the latest Personal Consumption Expenditure (PCE) price index report on Friday. These reports are expected to provide fresh insights into economic conditions in the United States.
Meanwhile, sluggish economic activity in China has added additional selling pressure on silver. Concerns over China’s weak economy were heightened by an unexpected rate cut by the People’s Bank of China (PBoC) on Monday. Silver, which is crucial for various industrial applications including electronics, solar panels and automotive components, is particularly sensitive to these economic conditions. Given China’s position as one of the world’s largest manufacturing hubs, the country’s industrial demand for silver is substantial.
India has reduced import duties on gold and silver from 15% to 6% to support its jewellery manufacturing sector, positively impacting demand prospects in the world’s second-largest bullion consumer.
Safe haven assets like silver could lose some demand due to rising optimism surrounding potential ceasefire negotiations between Israel and Hamas. Israeli Prime Minister Benjamin Netanyahu has hinted that a ceasefire agreement, which could lead to the release of several hostages in Gaza, could be in the works. Netanyahu is currently in Washington to address Congress, according to The Associated Press.
Egypt, Qatar and the United States are working to broker a phased deal between Israel and Hamas to halt the fighting and secure the release of the remaining hostages. Meanwhile, in China, Palestinian factions Hamas and Fatah have signed a declaration to form a unity government and resolve their long-running dispute.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
