January 8th Midweek Silver Market Update

Gold and silver were under selling pressure all day on Wednesday mostly thanks to a stronger US Dollar index. Today’s release of the latest FOMC minutes was heavily anticipated by investors everywhere though what the minutes had to say was nothing out of the ordinary.

Employment data released today was on the upbeat side and with more employment data set to be released both Thursday and Friday it is looking like gold and silver may be facing more selling pressure during the latter stages of the week.

Employment Data Pushes US Dollar Higher

Apart from the FOMC minutes released this afternoon, US investors also had the first of three pieces of employment data to mull over. Today’s ADP employment report showed that nearly 240,000 jobs were added this past December. The market had anticipated that 200,000 jobs were added in December which meant that the better than expected data only helped the US Dollar put more downward pressure on precious metals.

Tomorrow we will be greeted with the weekly jobless claims report and even though this report is important, investors will put much more weight on the non-farm payrolls data which is scheduled to be released on Friday.

FOMC Minutes Have Little Impact

Today’s FOMC minutes did not really tell investors anything they didn’t know. They made it clear that most members of the Fed have a stronger confidence in the overall US economy and that most members also agreed with the recent decision to taper Quantitative Easing. If the US economy continues to show strength the notion that the Fed may taper QE incrementally throughout 2014 will as well.

QE has been a bullish factor for gold and silver for as long as it has been around and the more it gets reduced the shakier investor confidence in precious metals will be. As it stands, the only real factor keeping gold afloat is the fact that every time the spot value drops bargain-hunters buy the metal and push the spot price back up, even if only slightly.

Posted in Market News

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