January 9th Silver Market Update

Gold and silver have gained a little value today thanks, in large part, to short-covering by investors. Economic information was not as plentiful today as it was yesterday and will be tomorrow, something that explains today’s quieter economic atmosphere. Instead of US jobs data, investors concerned themselves with the European Central Bank and Bank of England’s respective monthly meetings. Additionally, an economic report out of China quelled fears that inflationary pressures in the region were on the rise.

Tomorrow’s non-farm payrolls data is perhaps the most highly anticipated piece of data being made public this week and at this point the market is expecting to payrolls increase by about 200,000 this past December. Gold and silver did not fare all that well this week, but to be fair they didn’t do all that badly either.

ECB, BoE Meetings

Even though investors were not exactly expecting to hear of any major monetary policy shifts in the EU or the UK, they tuned in to the meetings anyway. The European Central Bank announced that it would maintain interest rate levels as president Mario Draghi made it clear that he plans on keep interest rates low for the foreseeable future. The meeting and press conference afterwards had little to no effect on precious metals spot values. The Bank of England more or less mimicked the ECB as it too announced that the country’s interest rates would remain constant.

In other news from the EU, German industrial production was up by almost 2% in November, a number that handily beat October’s 1.2% decline. This report does nothing more than reaffirm the fact that Germany’s economy has been a consistently strong performer, unlike most other European economies, namely Italy and Spain. With that being said, I would be remiss if i failed to mention that most economic data out of the EU has been positive as of late. Though recently strong reports give us no reason to believe that the EU economy is completely out of the woods quite yet, the EU, like the US, may be beginning to head in the right direction.

Finally, consumer price inflation was reported as rising by about 2.5% in December on an annual basis. The 2.5% increase in December is .5% less severe than what was recorded in November. Price inflation has been and will likely continue to be a major issue for investors to pay attention to in China.

Posted in News

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