Silver prices in the horizontal channel as Chinese factory activity slows
The price of silver is trading within a narrow range for the second consecutive session. On the one hand, falling US bond yields provide support for the precious metal. High Treasury yields generally increase the value of the US dollar and vice versa. In turn, the rise in US bond yields acts as a bearish catalyst for precious metals due to the inverse correlation between precious metals and the greenback.
Notably, benchmark 10-year Treasury yields have been declining since early April, when they hit a three-month high of 1.77. It has since fallen by around 31.55%. In the first session in August, 10-year Treasury yields are at 1.23; Down from Friday high of 1.27.
Nevertheless, the reduction in manufacturing activity in China held back the gains in the price of silver. Earlier Monday, the Middle Empire’s manufacturing PMI stood at 50.3 from the forecast 51.0 and previous 51.3. It is notably at its lowest level since April 2020. With China being one of the main consumers of industrial metals, the reduction in activity in its manufacturing sector has lowered the industrial demand for silver.
Technical perspectives of the price of silver
The price of Silver is trading in a narrow range between 25.63, which is Monday’s intraday high, and along the 50 day EMA at 25.35. At the time of this writing, it was down 0.15% to 25.45. On a two hour chart, it is trading along the 25 day EMA and slightly above the 50 day EMA.
In the short term, the price of silver is expected to stay in the horizontal channel. As the week progresses, a bullish breakout will place the nesting target at 26:00. However, bulls will need to break resistance at last week’s high of 25.80. On the other hand, a move below the current support level will cause the bears to look at the previous support levels of 25.10 and 25.00.