Silver Prices Explode Higher as Durable Goods Data Hints at Economic Slowdown

silver barsSilver prices jumped more than 2% on Wednesday morning, as a very weak durable goods data report and continued dovish actions from the world’s central bankers spiked investor demand for precious metals.

The demand for duable goods plunged 4% in June, said the Commerce Department. This monthly decline marked the largest drop since an 18.4% fall in 2014.

U.S. manufacturing faces continued headwinds from a stronger dollar as well as dwindling global demand for high-ticket items such as aircraft, which require large amounts of metals and other long-lasting materials to produce. If a longer downtrend in durable goods develops, it could well signal a recession is coming.

Overnight, Japan announced that its central bank would provide even more liquidity into its beleaguered markets than originally expected. In the U.S., the Fed will end its two-day meeting today, and you can bet this latest economic data point will encourage them to keep interest rates unchanged. It’s tough to be bearish on precious metals at this stage, given the inflationary measures taking place both at home and around the globe:

SLV-2016-07-27

The iShares Silver Trust ETF (NYSE:SLV) jumped to $19.02 per share on Wednesday morning, up $0.36 (+1.93%). SLV has gained more than 44% this year amid the silver price rebound.

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