November 5th Midweek Silver Market Update

Precious metals have spent most of the morning moving sharply lower in the wake of yesterday’s US midterm election results. Though this week still has plenty to offer from an economic standpoint, the election results brought about a massive reaction from investors. As you could have probably guessed, the fact that gold and silver are moving lower means that equities as well as the US Dollar are having a great day.

As we look ahead to the final two days of the week, investors will first be wanting to hear what the European Central Bank has to say in the wake of their policy meeting tomorrow. As of now, the market is, to an extent, expecting the ECB to announce further quantitative easing measures in hopes of spurring economic growth. In addition to this, Friday will bring about October’s employment data from the United States. If Friday’s data comes back better than what people are expecting, more pressure may be levied against precious metals.

Elections Results Go the Way of the Republicans

Yesterday brought about the midterm elections in the United States, and many, many governmental positions were up for grabs. When the dust finally settled, it was clear to see that Republicans had seized control of both the House and the Senate. This bodes well for the value of the greenback and US equities because Republicans are seen as more business-friendly and better for economic growth. Of course, because the elections were good for equities and the Dollar, they were horrible for gold and silver.

Now, gold and silver are both hovering in the neighborhood of 4-year lows and are looking weaker with each passing day. As it stands, there are little to no market factors coming to the aid of metals. In fact, the value of crude oil is continuing to depreciate, bringing the value of all raw commodities down with it. Barring any surprises in the next few days, this 5-day trading session will result in another weekly loss for both gold and silver. Just a few weeks ago it was looking as though gold and silver might be able to continue trending upward, but now, just regaining some of this past week’s losses would be seen as a victory. While I do anticipate that demand for metals, due to bargain prices, will grow, demand alone will likely not be enough to undo the losses metals have accrued in recent weeks.

Posted in Market News

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