Currently, demand for industrial metals is down after Chinese data came up short and both the United Nation and the IMF downgraded China’s growth, according to ForexTV. Meanwhile, the U.S. economic expansion was slightly weaker at the end of May, which also weighed on industrial metals.
“The visible underperformance of silver prices was, in our view, heavily influenced by a lack of industrial demand,” Bank of America metals strategist Michael Widmer said in a report. “This is perhaps best reflected in silver imports from the U.S. and Japan, generally hovering well below the longer-term average in the past 18 months. The picture has been similar in China year-to-date. While the country has remained a net importer, shipments have generally not broken out of the longer-term ranges.” [Good News, Bad News For Silver ETFs]
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Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD and SLV.