There were further negative influences on silver from a further sharp increase in bond yields and a strong dollar, but prices were resilient on hopes for a stronger global trend after firm PMI data.
Industrial commodities were generally firmer during the day, which provided some underlying support to silver. Confidence was boosted initially by the stronger than expected Chinese official PMI index, which boosted confidence in the Chinese and Asian growth outlook.
After sliding to lows near $16.30 on Wednesday, silver continued a gradual recovery to the $16.60 region following the Chinese data.
There were also firm readings for the Eurozone PMI index, although the overall impact was limited with most attention focussed on energy and currency markets.
Trends in the dollar and bond markets were inevitably very important during the day and the US currency continued to make headway against the yen with a further test of resistance above 114.50. There were, however, losses against Sterling and the Euro was also resilient, which pulled the dollar’s trade-weighted index lower on the day.
There was further selling pressure in US bond markets with 10-year yields moving above the 2.45% level. Higher yields did have a negative impact on silver, although the impact was offset by higher industrial commodities.
Silver overall dipped lower under the weight of yields, especially with gold also testing fresh 10-month lows, but there was support above Wednesday’s lows.
US jobless claims were higher than expected at 268,000 in the latest week from 251,000 previously and the highest reading since early August. The ISM manufacturing index was higher than expected at 53.2 for November from 51.9 previously with solid underlying conditions, although the orders component was uninspiring.
Although bond markets continued to retreat with US yields above 2.48% and gold prices remained under pressure, silver was able consolidate just below $16.50 late in the European session.
Trends in the dollar and bond markets will continue to have an important influence on Friday with added spice and volatility surrounding the US employment data.
Silver Prices 4H Chart