Silver price remains under pressure from the slower-than-expected recovery of the Chinese economy. In the ensuing sessions, investors may be hesitant to place huge bets. This as the markets await the US inflation data and Fed interest rate decision in the coming week.
China, the leading consumer of industrial metals and the second largest economy worldwide, continues to struggle with recovery from the COVID-19 induced slowdown. As has been the case in recent months, concerns over these struggles have been weighing on silver price.
Data released earlier on Wednesday showed that the country’s exports dropped by 7.5% as compared to a similar period in 2022. The figure released by the nation’s General Administration of Customs was a significant decline from the analysts’ forecast of a 0.4% drop.
At the same time, its imports came in better than the experts’ expectation of an 8% fall by dropping by 4.5% YoY. As a result, the monthly trade surplus dropped by 16.1% at $65.81 billion.
The better than expected imports data may be a sign that the Chinese economy is still on the right track to recovery. This optimism will likely continue to offer some support to silver price.
As an industrial metal, Japan’s GDP on Thursday and China’s CPI numbers on Friday will further impact its price.
Uncertainty over the Fed
In addition to being an industrial metal, silver is also a precious metal. Similar to gold and other precious metals, uncertainty over the Fed’s decision during its June meeting has been weighing on silver price.
Amid hopes that the US central bank is nearing the end of its aggressive rate-hike cycle, some analysts forecast that it may maintain a hawkish tone in its next meeting scheduled for 13th – 14th June. In the ensuing sessions, the dual-status metal may remain range-bound as investors eye the US CPI data and Fed interest rate decision in the coming week.