Silver prices are slightly higher today in quiet dealings. Silver has had an uneventful week thus far as prices seem to be continuing their consolidation efforts. The longer this sideways price action goes on however, the bigger the potential breakout in price may be-whether it is to the upside or to the downside. The market has stabilized following the heavy losses seen in April and may now just be looking for the perfect catalyst to stage a sizable move.
There are several things going on currently that could have a dramatic impact on the silver market. Stocks have come under pressure lately as the economic data stream has shown some cause for concern. As a matter of fact, stocks are getting hammered today with the SP 500 down over 23 points. Many aspects of the economy appear to be slowing-and the problem is not just here in the U.S. but globally.
Yesterday’s ISM manufacturing data showed the biggest contraction in business activity in almost four years. Today’s private sector jobs report has apparently caused some concerns over how the numbers may play out on Friday when the U.S. Department of Labor releases its monthly non-farm payrolls report. This report could prove to be the catalyst that wakes silver from its slumber. There has been much debate in recent weeks as to when the fed may begin to taper its bond buying operations and if it does so by how much.
Perhaps Friday’s report will shed some light onto this subject. Given the recent let down in data, it would seem quite possible that the fed elects to hold off for a while-that being said a big upside surprise in the jobs data could also make the case that the time is fast approaching for the fed to begin to wind things down. Investors will just have to wait and see how it plays out on Friday.
In the meantime, physical demand for silver and precious metals has remained robust. Nothing has changed regarding the silver market from a fundamental standpoint. prices seem to be making a stand at current levels, although should lower prices come to fruition many feel it would simply provide good buying opportunities. We are looking for this market to breakout here in the coming days and or weeks.
We do not know which way it will go. We do feel however, that should the data continue to disappoint, or should it become clear that the fed may be forced to continue QE at its current pace, the price of silver could rise in dramatic fashion. The price action is starting to look a lot more constructive, and there are so many investors that are “short”silver a big move to the upside would not be at all surprising.
This market update is provided weekly with analysis. You can always check spot silver price by watching our on-site charts.