April 3rd Silver Market Update

Gold and silver are trading slightly lower on Thursday as the lack of any bullish news continues for yet another day. This week’s US economic data stream will take a one-day hiatus today, but investors are preparing themselves for the all-important non-farm payrolls data due out on Friday. After multiple high-ranking members of the Fed spoke positively of the US economy and job growth barely a week ago, the marketplace will be expecting to see non-farm payroll additions in March meet or surpass the 200,000 mark.

Today’s major focus, however, has been the European Central Bank policy meeting and its outcomes. ECB president Mario Draghi also spoke today, and his words were closely scrutinized by investors.

ECB Leaves Interest Rates Unchanged

Despite deflation concerns spreading across Europe like wildfire currently, the ECB decided to leave interest rates at current levels and hold off instituting any sort of new monetary stimulus measures. While the EU’s central bank did not make any major moves this time, president Mario Draghi alluded that monetary stimulus is by no means out of the question.

Before the ECB’s meeting even kicked off, deflation concerns were given an unwelcome boost due to a producer price index report from February. According to the report, which was released Wednesday, the EU’s PPI declined by .2% in February and was down by nearly 2% year on year. This is the largest annual decline in nearly 5 years and is doing nothing to help the euro currency, which lost value in the wake of the news and ECB decision, or lack thereof.

All this news was ultimately bearish for precious metals, who are being pressured by the US Dollar more readily today. Currently, it is clear that market bears are in control and that spot gold and silver may not even be able to sustain current price levels for all too much longer.

As we look ahead to tomorrow, the non-farm payrolls data is just about the only thing on the minds of investors. Unofficially, the market is expecting to see a non-farm payroll increase of roughly 200,000 in March. After Janet Yellen and St. Louis Federal Reserve bank president James Bullard both expressed their belief in the strength of the US economy and job growth, it comes as no surprise that investors are expecting healthy job growth. There are few new geopolitical developments for the market to talk about as the crisis in Ukraine slowly fades further into the background. The market is continuing to keep an eye on Russia’s moves both politically and militarily, but have so far come across nothing worthy of being concerned about.

Posted in News

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