May 1st Silver Market Update

Gold and silver are both feeling continued heavy selling pressure on Thursday after the FOMC decided to further reduce Quantitative Easing. In addition to the conclusion of the latest FOMC meeting, yesterday also yielded the 1st quarter GDP report for the United States. There is still plenty of economic data to look forward to throughout the last two days of the week, including a key manufacturing report out of China today and tomorrow’s release of the latest US Labor Department employment figures.

The crisis in Ukraine is still catching the attention of the marketplace but has mostly been overshadowed by the large amount of economic data being released this week. As a result, safe-have demand for gold and silver as a result of the crisis in Ukraine has diminished and is being replaced by more heavy selling pressure. As it stands, gold is well below the $1,300 threshold while silver remains below the $20/ounce mark.

Economic Data Released, More To Come

Before the FOMC meeting concluded on Wednesday, the 1st-quarter GDP report for the United States was made public. Even though it was widely expected that annual GDP growth for January through March would be up by more than 1%, the actual figures showed only a .1% increase in 1st-quarter GDP. Normally, this type of weak data would make present a perfect opportunity for precious metals to post solid gains, but such was not the case yesterday. Instead, most investors simply held their position as they awaited the conclusion of the FOMC meeting.

As many expected, this week’s FOMC meeting yielded yet another $10 billion reduction to Quantitative Easing, something that is bearish for precious metals. What’s more, the FOMC reiterated its positive outlook on the US economy, though this was seen in the fact that tapering was intensified. The icing on the cake from a US economic data standpoint will be Friday’s non-farms payrolls data from March. Currently, the market is expecting to see at least 200,000 jobs added to the economy in April, if this is the case gold and silver might see even more selling pressure.

In addition to this week’s economic data, the marketplace is still paying close attention to anything and everything developing in Ukraine. The violence has not gotten all that much worse this week, but many fear that the crisis will deteriorate before it gets any better. For this reason and more, the market will continue to pay close attention to all the latest developments from Ukraine.

Posted in News

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