Silver Under Pressure After U.S. Manufacturing PMI ClimbsSilver prices have steadied, after an unexpectedly strong manufacturing report sent silver lower. WIth the coronavirus outbreak still out of control, we could see silver prices rebound.
Silver has steadied in Tuesday trade, after falling 1.8% on Monday. Currently, silver is trading at $17.72, up $0.04 or 0.24% on the day.
Risk Appetite Improves on U.S. Mfg. PMI
There was positive news from the manufacturing sector on Monday. The ISM Manufacturing PMI rose to 50.9 in January, up from 47.2 a month earlier. This figure beat the forecast of 48.5 points. This marked the first reading indicative of expansion since July. As well, Manufacturing PMI slowed to 51.9, down from 52.4 a month earlier. The U.S. manufacturing sector has been depressed for a lengthy period, exacerbated by the U.S.-China trade war. There are hopes that the ‘Phase One’ limited trade accord, under which China has committed to purchase more U.S. goods, will lead to stronger manufacturing numbers during the year.
Coronavirus Outbreak Worsens
The China coronavirus continues to weigh on global markets. The outbreak has killed over 400 people in China and infected some 20,000 others. Chinese officials have shut down two-thirds of the country’s economy, and the week started out in dismal fashion, as China’s stock markets fell 9 percent on Monday after being closed for a week. As other countries scramble to seal their borders from Chinese travelers, there is no sign that Chinese officials have the outbreak under control, so safe-haven silver could get a lift if investor risk appetite falls.
Silver Technical Analysis
The 18.00 level has proven to be a resilient resistance line. There is further resistance at 18.60 and at the round number of 19.00. At the same time, there are significant support barriers to the metal dropping lower. The 200-EMA is situated at 17.65, followed by a support level at 17.50. Below, there is support at the round number of 17.00.