Gold: $1,288.11 -4.56
Silver: $17.07 -0.10
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September 5th Weekly Silver Market Update
Article By: Kyle Wanchalk on September 05th, 2014

For precious metals spot values, this is a week that could not possibly end soon enough. After conceding a lot of value to begin the week on Tuesday, the duration of the week saw the selling pressure remain more or less constant. The reason for this is due to the overwhelming amount of economic data that was made public, most of which was upbeat in nature. The two biggest events of this shortened trading week came yesterday and today in the form of the European Central Bank’s monthly policy meeting and the release of the United States’ employment report for August.

This week also saw the attention of investors shift to the ongoing conflict in Ukraine. On Tuesday, news with regard to a possible ceasefire began making rounds. Unfortunately, this report was later proven to be errant and Russian officials admitted that no such agreement had ever been reached. As a result of this, the violence across Eastern Ukraine is continuing and in many ways only growing worse.

ECB Announces Rate Cuts, Stimulus Package

Though there was a good bit of economic activity this week, few pieces of data or events were more important than Thursday’s European Central Bank meeting. After ECB president made it clear a few weeks ago that fresh monetary stimulus is in the works for Europe, a lot of investors anticipated that this week’s meeting was when the stimulus announcement would be made.

Before US markets opened on Thursday, it was reported that the ECB reduced its main refinancing rate to an all-time low of 0.05%. In addition to this, Mario Draghi announced the framework for a stimulus package that looks very much like the United States’ Quantitative Easing program. As a result of all this activity, the Euro declined dramatically while the USD Index rose to a fresh 13-month high. The Euro is expected to continue conceding value simply because that is the nature of the policies being implemented by the ECB. For the greenback, this is very good news.

Jobs Data Falls Short of Expectations

While Thursday saw the attention of the global marketplace shift towards the European Central Bank meeting, today saw investors focus on the release of the latest non-farm payrolls data from the United States in August. Prior to this morning, it was expected that at least 215,000 new non-farm jobs were added in August. Unfortunately, the figures came out this morning and showed that just over 140,000 jobs were created in August.

As you could have probably deduced, today’s poor data ended up having a wholly negative impact on the progress of US equity markets and the value of the US Dollar. Precious metals were supported as a result of this, but that support did more in the way of limiting selling pressure than it did to contribute to any gains.

It will be interesting to see how investors digest this data over the weekend. Next week will be yet another busy week full of economic data, so there will be little respite for investors.