- Silver prices are gaining ground ahead of the release of US economic data, including Non-Farm Payrolls on Friday.
- The complex economic scenario in the US could boost demand for less risky assets such as Silver.
- Growing concerns about China’s economic outlook could negatively impact demand for industrial metals.
Silver (XAG/USD) price is appreciating near $29.00 per troy ounce during early European hours on Friday. Traders are evaluating the upcoming US Nonfarm Payrolls and Average Hourly Earnings data for July, due out later in the American session, for insights on the US labor market.
The latest manufacturing and labor market data have created a complex scenario involving an economic slowdown in the United States and growing expectations of a Federal Reserve rate cut. If the economic slowdown worsens significantly, it could affect market sentiment, making any Fed rate cut less impactful. Against this backdrop, demand for safer assets such as Silver could increase.
The US ISM manufacturing Purchasing Managers’ Index (PMI) fell to an eight-month low of 46.8 in July, compared with the previous reading of 48.5 and a forecast for an increase to 48.8. US Initial Claims for Jobless Benefits for the week ended July 26 rose to 249K from 235K in the previous week, beating the forecast for an increase to 236K.
In China, the July Caixin manufacturing PMI came in at 49.8, below the expected 51.5 and the previous 51.8. The weak China Purchasing Managers’ Index (PMI) data raises concerns about economic activity in the world’s manufacturing hub. This situation could negatively impact demand for Silver as the precious metal is crucial in various industrial applications including electronics, solar panels and automotive components.
In addition, safe haven demand for the grey metal has increased due to rising geopolitical tensions in the Middle East. Tensions in the Middle East remain high following the assassination of Hamas leader Ismail Haniyeh in Iran.
According to the New York Times on Wednesday, Haniyeh was killed in Iran’s capital after attending the inauguration of the new president. Both Iranian officials and Hamas have accused Israel of being behind the attack.
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.
