Silver Price: XAG/USD nosedives to near $29 as China offers sluggish fiscal boost

NEW YORK (July 19) Silver price (XAG/USD) plummeted to near $29.00 in Friday’s American session. The white metal faces an intense sell-off as the outcome of China’s third plenum meeting had less stimulus measures to address economic challenges and was more focusing more on “high-quality development”.

World’s second-largest economy struggles to maintain the economic growth momentum due to poor demand from domestic and the overseas market. Therefore, investors were expecting big bold fiscal measures China’s Communist Party to uplift growth prospects.

Absence of strong fiscal measures to boost industrial output has weighed on the Silver price. The application of Silver, as a metal, has application in various sectors such as Electric Vehicles, medical appliances and consumer durables.

Meanwhile, a sharp recovery in the US Dollar (USD) due to growing speculation for Donald Trump’s victory in upcoming United States (US) presidential elections has also weighed on the Silver price. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, advances to near 104.30 after recovering from an almost four-month low of 103.65. Improved appeal of the US Dollar makes the Silver price an expensive bet for investors.

However, the Federal Reserve (Fed) is widely anticipated to start reducing interest rates from the September meeting. The expectations rose by cooling inflationary pressures and easing labor market strength.

FXStreet