Silver Price News: Silver Ends Week on a Positive Note

Silver put in a strong performance yesterday, at one point hitting a two-week high above $30.7/toz. The metal still appears to be supported above the rising 50-day simple moving average, currently at $29.1/toz,

However, it remains to be seen whether there is sufficient momentum to challenge the next area of resistance at $30.9/toz – $31.2/toz. Indicators, such as RSI are currently ambiguous. If breached, the next resistance level appears to be $32.2/toz-$32.5/toz. Today’s early trading sees silver at $30.7/toz.

As explained in some detail in today’s gold report, traditional US rate drivers have become somewhat more challenging in recent trading, so the simple narrative that falling rate expectations are responsible for silver’s performance appear unsound. In any event, silver has historically been less sensitive to interest rates than gold.

By the same token, silver is also less established as a hedge against geopolitical risk, which we identify as the most likely driver of recent gold price performance. More broadly, we would argue that silver merits more serious consideration as an investment metal as it has a strong secular growth story (photovoltaics) and the market remains in deficit, even in the current absence of strong investment demand.

Nevertheless, it remains the case that cyclical economic momentum has waned, with the most recent data points of EU car registrations, US building permits and overnight Australian flash PMIs all disappointing. Nevertheless, silver has been quite resilient and China’s price premium has persisted.

The market calendar for today includes Euro Area, UK and US flash PMI data for June, with a focus on the New Orders sub-component of the Manufacturing PMI as lead indicators of industrial growth.