Silver Price Analysis: XAG/USD tumbles 1.5% after upbeat US economic data
- Metals under pressure following stronger-than-expected US data.
- Rising US yields and an appreciation of the Greenback weigh on silver.
- XAG/USD has erased daily and weekly gains in a few minutes.
Silver has reversed sharply following the release of US economic data that came in above expectations. XAG/USD dropped from weekly highs above $25.00 to the $24.50 area in a few minutes, falling 1.50% on a daily basis. The metal also erased weekly gains.
A strong US economy
The US economy grew at a 2.4% annual rate during the second quarter, above the market consensus of 1.8%. The report showed that the GDP deflator declined from 4.1% to 2.6% and the Core Personal Consumption Expenditures Index from 4.9% to 3.8%. The June Durable Goods Order report showed a 4.7% increase, above the estimated 1%. Initial Jobless Claims dropped to 221K, the lowest in five months.
The numbers triggered a rally for the US dollar across the board and sent US yields to the upside. Metals tumbled after the report, with Gold losing more than $20 since the data came out and trading at $1,955.
XAG/USD is testing the $24.50 area and below, with attention turning to the weekly low at the $24.25 area. The next support is seen at $24.00/23.95. The short-term outlook for Silver has turned negative, and a rebound above $25.00 would be needed to reverse it. Before that, an interim resistance emerges at $24.70.
Technical levels