• Sun. Feb 16th, 2025

Silver Price Outlook: XAG/USD Holds Above $30.50 Supported by Robust Chinese Economic Data

XAG/USD

Featured Brokers

Liquidity

Min. Deposit: 100 USD

Regulated: NFA, CFTC

Broker Type: ECN, STP

Shenzhou

Min.Deposit: 50 USD

Regulated: FSA, CySEC

Broker Type: STP

Skylinks

Min.Deposit: 50 USD

Regulated: FSA, CySEC

Broker Type: STP

AvaTrade

Min.Deposit: $100

Regulated: CySEC

Broker Type: ECN, STP

  • Silver prices could see further gains on Friday, driven by strong economic data from China.
  • China’s value-added production above this size increased by 6.2% in December compared to the same month of the previous year, recording the fastest increase since April.
  • Following weak data in the US, speculations arose that the Fed would implement two interest rate cuts by 2025.

Silver prices (XAG/USD) held steady after three days of gains and traded around $30.80 an ounce in Friday’s Asian session. Industrial gray iron demand could pick up, supported by strong economic data from China.

China’s manufacturing output of over this size rose 6.2% year-on-year in December, beating industry expectations and the previous quarter’s 5.4% growth. Month One. This was the fastest manufacturing growth since April, largely driven by stronger output following September’s stimulus measures.

In addition, China’s gross domestic product (GDP) increased by 5.4 percent in the fourth quarter of 2024, up from 4.6 percent in the previous quarter. On a quarterly basis, the economy grew by 1.6 percent in the fourth quarter, in line with industry estimates, after expanding by 0.9 percent in the previous quarter.

Base metals prices found support as expectations grew that the Fed would cut interest rates this year. The U.S. central bank’s moderate outlook was supported by weaker-than-expected U.S. retail sales in December rose 0.4% from the previous quarter to $729.2 billion. The figure fell short of the market’s expectation of a 0.6% increase and was also lower than the previous month’s 0.8% (revised) increase.

In addition, weaker-than-expected U.S. fiscal resources have led to market speculation that the Fed could implement two rate cuts this year. In December, the core consumer price index (CPI), which excludes food and energy costs, rose 3.2% from a year earlier, slightly below the 3.3% increase last month and the market estimate of 3.3%. The month’s core CPI rose 0.2%, compared with a 0.3% increase last month.

At press time, the 2-year and 10-year U.S. Treasury yields were at 4.23% and 4.60%, respectively, giving silver more support as a safe-haven asset. Both stocks are down more than 3% on the week.

The US Dollar Index (DXY), which measures the greenback’s performance against a basket of six major currencies, was trading at 109.00, holding on to a five-day high. A weaker dollar makes money cheaper for buyers using foreign currencies, which in turn increases demand for precious metals.

Expectations of cost cuts are also rising in the UK, where economic data has been mixed. In November 2024, UK GDP grew by 0.1% quarter-on-quarter, reversing a 0.1% contraction in October and September, but falling short of the 0.2% increase expected.