November 6th Silver Market Update

For yet another day this week, gold and silver are both trending lower and hovering around 4 and 5-year lows. Yesterday brought about reaction to Tuesday’s midterm elections in the United States, but today, the focus of investors shifted to the latest European Central Bank meeting. Looking ahead to tomorrow, the attention of the marketplace will shift once more, this time to the release of October’s employment data from the United States.

In case you missed it, Tuesday’s midterm elections went the way of the Republicans as they were able to grab a hold of both the House and the Senate. For gold and silver, a Republican majority is considered to be bearish due to Republicans being seen as more likely to grow the economy and better for business in general. As you probably could have guessed, the election results from earlier this week almost wholly worked against precious metals.

European Central Bank Leaves Rates Unchanged

Unless you have been out of the news loop for a few months now, it should come as no surprise that this week brought about more dire economic news from the EU. Included among this poor data was a German 5-year bond auction that fetched all-time low average yields which were somewhere in the neighborhood of .12%. Because of the persistently poor economic data stemming from the European Union, investors the world over placed extra emphasis on today’s European Central Bank meeting.

With all of this attention came speculation, and many people were expecting the ECB to follow in the footsteps of the Bank of Japan last week and introduce fresh quantitative easing measures. Unfortunately, Mario Draghi and his colleagues kept rates unchanged and did not make any other policy moves. He did say that policy-makers will have policy changes in their arsenals, but did not explicitly say that new monetary policy measures will be instituted anytime soon.

Now, as we look ahead to the final day of the week, investors will be anxiously awaiting tomorrow afternoon’s release of employment data from October. As it stands, polled analysts are expecting around 230,000 non-farm jobs to have been created last month. If you can remember, September saw expectations of 215,000 new jobs shattered when it was announced that, in reality, nearly 250,000 new jobs were created. Now, with most people taking on a favorable outlook on the US employment sector, no one would be surprised to see tomorrow’s figures beat the experts’ expectations. Unfortunately for gold and silver, however, an upbeat employment report will likely only add more selling pressure on gold and silver.

Posted in News

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