Silver futures for September delivery closed at $18.637 an ounce on Jun 30, up 3.17% in a day. The white metal has notched a gain of 31% in the second quarter — a dramatic comeback from a decline of 21% in the first quarter. Given that industrial applications account for 60% of the global silver consumption, the slowdown in industrial activity amid the COVID-19 pandemic severely impacted demand. The turnaround can be attributed to optimism over financial stimulus and pickup in industrial activity as economies are gradually opening or easing restrictions.
Industrial Demand to Buoy Silver
Per the Institute for Supply Management, the U.S. Manufacturing Purchasing Managers’ Index (PMI) came in at 52.6% in June after a reading of 43.1% in May. After remaining below 50 (which indicates contraction) for three consecutive months due to the damage inflicted by COVID-19 pandemic, the PMI has finally crossed the 50 mark. The