Silver Price Dips as Strong US Manufacturing Report Boosts Hawkish Fed Outlook
The Silver price is down 0.73% on Monday to around $57.20 after a strong US manufacturing report reinforced expectations that the Federal Reserve will maintain a restrictive monetary policy.
The Institute for Supply Management reported its Manufacturing Purchasing Managers Index rose to 55.6 in July from 53.3 in June, beating market expectations of 54.
Four of the five PMI sub-indices accelerated compared with June, confirming the strengthening momentum in the manufacturing sector, according to Susan Spence, Chair of the ISM Manufacturing Business Survey Committee.
The report's underlying components also pointed to a resilient manufacturing sector. The Employment Index climbed to 52.8 from 49.7, signaling a return to payroll growth, while the Prices Paid Index eased slightly to 71.1 from 73 but remained above the market forecast of 70.3.
Higher-for-longer interest rate expectations increase the opportunity cost of holding non-yielding assets such as Silver, limiting its upside despite recent support from easing geopolitical tensions in the Middle East.