March 6th Silver Market Update

Gold and silver are trading up in the morning hours of Thursday thanks to a sell-off of the US Dollar. The euro currency is making significant strides forward thanks to some comments from ECB president Mario Draghi. Investors are still keeping an eye on the situation in Ukraine, but are also seeing tensions calm down significantly in recent days.

Yesterday, the world was greeted with yet another disappointing report with regard to job additions in February. For the third consecutive month this year, the number of jobs added to the economy was fewer than what the market had expected. Today, however, the market was given some decently positive employment numbers, something that effectively confused many people.

Risk-Appetite On the Rise This Week

Only a week ago, it seemed as if the turmoil in Ukraine would escalate into either a civil war or some type of armed conflict with Russia over the Crimea region of southern Ukraine. Even earlier this week, when false rumors with regard to a threat of force by Russia circulated, the world was preparing for some type of large-scale military operation in the eastern European nation. Since Monday, however, tensions have calmed down as leaders from Russia, Ukraine, and the West more readily seek diplomatic solutions to resolve this Ukrainian crisis.

The calming down of tensions revived investor risk-appetite and saw US equities make significant gains. As US stocks performed well, the spot values of gold and silver declined. While US equities are still performing well today, spot gold and silver was able to regain some ground as the US Dollar sold off at a rapid pace. Mario Draghi, president of the European Central Bank, made hawkish remarks with regard to EU monetary policy today; remarks which ended up giving the euro currency a boost. While spot gold and silver are trading up today, the revival of US equities will make it hard for either metal to make any significant gains.

Looking Ahead To Next Week

As we look ahead to the second full week of March, investors will be continuing to pay attention to the situation in Ukraine as it has taken a turn in a new direction today. Earlier this morning, Russia announced that it will reclaim the Crimea region as part of their nation. Though Ukraine and the US vehemently oppose such an action, Russia seems unwilling to compromise on the matter. In only a few weeks’ time, Russia will allow the citizens of Crimea to vote on whether they want to remain part of Ukraine or if they would rather become part of the Russian federation. The vote seems more symbolic than anything as an overwhelming majority of Crimeans are ethnic Russians and are more loyal to the Kremlin than they are Ukraine.

Nonetheless, we will continue to monitor the situation and analyze each and every development as they are made public.

Posted in News

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