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The market took a dim view of the latest Caixin manufacturing PMI figures from China released Thursday, which showed a contraction in July among privately-owned companies, against market expectations of an expansion. As one of the world\u2019s largest consumers of silver, any slowdown in manufacturing in China represents a bearish demand signal for the grey metal.<\/p>\n\n\n\n
The figures followed Wednesday\u2019s official NBS manufacturing PMIs for China, which relate to larger state-owned companies, and these also showed a slight decline in July, representing a third straight month of contraction in factory activity.<\/p>\n\n\n\n
Compounding this effect, US ISM manufacturing PMI figures for July released on Thursday also showed a more acute drop than the market had expected. While gold tends to benefit from economic uncertainty, silver can react negatively as roughly 50% of demand for the metal comes from industrial consumption.<\/p>\n\n\n\n
Silver prices have shown a clear downward trend since late May, and eyes will be on the range of $27.00 to $27.50 an ounce to see if buy-side support will kick in to break this descending price channel. Looking ahead, the markets will be watching out for the US non-farm payrolls figures for July on Friday as well as the July unemployment rate and factory orders for June.\u00a0<\/p>\n\n\n\t\t\t