June 4th Midweek Silver Market Update

Gold and silver spot values are, for the first time in more than a week, trading higher to begin the day. The elevated spot values are nothing more than a result of a weaker US employment report for May, of which was released earlier this morning. Despite there being a healthy amount of US economic data on the slate today and this week, the general attention of the marketplace remains fixated upon the European Central Bank’s policy meeting, which is scheduled for tomorrow. Speculation with regard to the meeting and its possible outcomes has been raging for the past week or more and, as you can tell, has not boded well for gold nor silver.

Not helping matters at all is the fact that the market has more or less forgotten about the crisis in Ukraine. Now that it is seen as more of a regional dispute as opposed to something the world should be paying attention to, safe-haven demand for precious metals has not been a factor for about two weeks now. Still , the situation is very volatile and stands the chance of overflowing into widespread violence and unrest at any particular moment.

US Employment Data Boosts Gold, Silver, ECB Meeting Still On The Slate

This morning provided investors with a temporary distraction from all the speculation with regard to tomorrow’s European Central Bank policy meeting. Shortly after markets opened today, the investing world was dealt May’s ADP employment report for the United States. As always, the market was expecting to see monthly job growth somewhere in the neighborhood of 210,000, but such was not the case. The actual job growth figures show that just under 180,000 new jobs were added to the US economy in May, more than 30,000 shy of what the market was expecting to see. As a result, gold and silver spot values were able to halt their decline and turn early morning losses into marginal early morning gains.

Will metals be able to hang on to these gains? Currently, all signs are pointing to no, but there is still definitely a chance.

Tomorrow will be, without a doubt, the most important trading day of the week. The ECB is scheduled to meet and the outcome of their meetings seems to already be set in stone by the wider investing world. As a result of deflationary pressures that have been plaguing Europe for the past year or more, many market analysts and experts alike believe that this is the month where we will finally hear about upcoming monetary stimulus measures.

If new monetary stimulus is put into action by the ECB, all signs are pointing towards it having a negative impact on gold and silver. The reason for this is because fresh monetary stimulus will, in all likelihood, devalue the euro currency. If the euro currency loses value at an accelerated rate, there is no reason why the US Dollar would not make significant gains. If and when the Dollar capitalizes on this new momentum, there is a strong possibility that gold and silver will be pushed downward as well.

With all this in mind, it is important to note that there are still those folks who believe any stimulus present in a major economy will end up being a bullish factor for raw commodities.

Posted in Market News

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