Positive Manufacturing Data Allow Silver Price to Outperform Gold
Silver is currently outperforming gold in today’s trading sessions. While gold prices are up by 1%, silver price action is pushing beyond the 4% gain level and now trades at a one-week high above the $25 mark.
The main reason for today’s bullish silver price action on the XAG/USD daily chart is the positive manufacturing PMI numbers from the US and China, indicating a better-than-expected improvement in factory business conditions. Silver is an industrial metal, and its price activity can be used as a barometer of business conditions around the manufacturing sector. With 40% of the world’s production domiciled in the country, China’s manufacturing PMI data impacts silver prices.
With upbeat manufacturing PMI numbers for the US and China as well as the better-than-expected rise in factory orders in the US, the silver price activity on the day has received a good boost, fundamentally speaking, allowing it to continue its impressive assent.
Silver price currently trades at $25.32 as at the time of writing.
Technical Outlook for Silver Price
Silver price action on the XAG/USD chart is about to challenge the resistance posed by the 26.325 price level (September 2011 and January/July 2012 lows). A break of this price level to the upside allows the XAG/USD pair to trade at levels not seen in nearly eight years. This breakout move would put the white metal on course for a collision with the 28.073 resistance level, which is where the March 2013 lows are found. The highs of June 2012 and lows of December 2012 at 29.919 form another resistance target for the medium-term.
Conversely, a rejection and pullback at 26.325 could allow traders on silver to initiate an overdue correction towards the 23.027 price level, with 21.332 and 20.734 price levels beckoning as the next support targets.
Silver Price Chart (weekly)