On Monday, silver prices were up by 2.97% to trade at $27.10. The upward trend was a reaction to the manufacturing PMI readings from various key economies. China, Japan, South Korea, and India have all seen an expansion in their manufacturing sectors’ activities. Investors are also eyeing manufacturing PMI data from the UK, Europe, US, and Canada. Furthermore, as a safe haven, the demand for silver has risen as coronavirus cases surge.
Countries record expansion of their manufacturing economies
Silver prices are reacting to the manufacturing PMI data set for release today in various markets. Based on its status as an industrial metal, activities in the manufacturing sectors of key economies impact its prices. On Monday, part of the figures that have caught the attention of investors looking to buy silver is China’s Caixin manufacturing PMI.
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According to IHS Markit, December’s manufacturing PMI stands at 53.0. In comparison, November’s reading was 54.9. Analysts had expected this month’s figure to drop by just one point to 54.8. While the numbers are lower than expected, they are still above 50. This is an indication that China’s manufacturing economy expanded in December; albeit at a slower pace.
At the same time, South Korea’s Nikkei Manufacturing PMI stood unchanged from November’s 52.9. In Japan, the figures have come in at 50.0. Experts had predicted that the reading will coincide with the previous month’s 49.7. In the case of India, the Nikkei Markit manufacturing PMI came in lower than expected at 56.4. Analysts had forecasted that December’s reading will be at 56.6 compared to the prior month’s 56.3.
As the day proceeds, silver prices are set to react to manufacturing PMI figures from the UK, Canada, US, and Europe. In the eurozone, experts expect the numbers to remain unchanged at 55.5. A similar scenario has been predicted in Germany. Analysts predict that activity in the country’s manufacturing sector will be at 58.6 for the second month in a row.
In Italy, France, and Spain, the estimates are higher than last month’s figures. Investors will also be keen to see if the US and Canada’s readings will beat the prior month’s numbers of 56.5 and 55.8 respectively.
Rise in COVID-19 cases push silver’s demand as a safe haven
Silver prices are also reacting to the rising demand of the metal as a safe haven. Coronavirus cases have continued to surge in the new year. In Japan, the government is considering pronouncing a state of emergency in the Tokyo region. The consideration results from the climbing COVID-19 numbers. On 31st December 2020, the country had a record 4,520 additional cases.
In the UK, coronavirus cases are still at record levels following the new strain of the virus. Subsequently, British Prime Minister Boris Johnson has hinted at stringent lockdown restrictions. The situation is no better in the US as the country recorded 194,337 new cases yesterday.