Silver prices are moving higher today joining stocks and crude oil. The U.S. dollar index is slightly higher on the day as well.
Precious metals are only modestly higher today as investors continue to seek out more clarity surrounding the Fed’s plans with regards to interest rates. This morning saw some weak data released in the U.S., and there remains a good deal of debate about whether or not the central bank will in fact raise rates this year.
Adding to the debate was the most recent non-farm payrolls data that was released earlier this month. While some have attributed the slowdown in hiring to weather and other factors, there remains skepticism about the health of the U.S. economy. Some believe that the Fed will not raise rates in June or September, and that the central bank may hold off until sometime next year. The non-farm payrolls data for April will be closely scrutinized when it is released in a few weeks. Another poor reading on the jobs situation may bolster the notion that the Fed will be patient and hold off on any rate hikes.
Silver and gold are also likely paying close attention to the Euro. The ECB held rates steady, and the economic health of the EU remains a concern. Conversely, the dollar index has largely undone recent chart damage and may be poised to begin making fresh highs. Should this prove to be the case, dollar strength may limit buying interest in silver and other precious metals.
Of note today is the rally being seen in crude oil prices. Oil is rallying following a smaller than expected build in supplies. Oil has broken above some recent highs, and the possibility of a large scale short covering rally exists. Should oil continue to kove higher, it may give silver prices a boost as well.
Silver does appear, however, to be quite comfortable in its current trading range. The $15.50-$17.50 range has largely contained prices for some time, and may continue to do so until more is known with regards to interest rates.
A possible catalyst for a breakout in silver is the ongoing negotiations between Greece and the EU. These talks do not appear to have accomplished much thus far, and should the deadline approach without an agreement in place, nervous investors may potentially flock to the precious metals complex.