Silver price edged lower on Monday as traders locked in profits after the two-week rallying that had the commodity hit a 7-week high on Friday. Besides, the reported decline in Chinese industrial profits have further weighed on the asset. Granted, concerns that the banking crisis will further spread across the globe continues to offer some support to the precious metal.
China is the leading consumer of silver and other industrial metals worldwide. As such, demand levels in this Asian country is one of the leading drivers of silver price. In fact, optimism over China’s economic recovery after the COVID-19 pandemic has been one of the major bullish drivers that have supported the asset above the crucial level of $20.00 since November 2022.
While this optimism is set to boost silver price in the long-term, headwinds continue to curb its gains. More specifically, the commodity began the week on its back foot as the Chinese industrial profits sank further.
Data released by the National Bureau of Statistics (NBS) early on Monday showed that industrial profits in the Asian country dropped significantly in the initial two months of 2023. Compared to the prior year’s decline of 4%, the profits sank by 22.9% between January and February 2023.
Slow global growth has continued to offset the recovery of manufacturing activity in China. Besides, instability in the country’s real estate sector has been barring the expected aggressive rebound. Later in the week, silver price will further react to the Chinese manufacturing PMI data set for release on Friday.
Amid the ongoing concerns over the banking crisis, investors will also be eyeing the US consumer confidence data on Tuesday and PCE price index on Friday. US GDP is also scheduled for release later in the week.
Silver price prediction
A look at its daily chart shows silver price still trading above the 25 and 50-day EMAs. As the bulls remain in control, I expect the commodity to remain above the psychologically crucial zone of 22.00. Nonetheless, 24.00 may be evasive for a while longer.
In the short term, the range between 23.31 and 22.75 will be worth watching. Further pullback will likely place the support at 22.50. On the upside, a rebound past the aforementioned range may face resistance at 23.65.