Silver is trading slightly higher this morning as gold sees some moderate selling pressure. Stocks and crude oil are both moving higher while the dollar index loses ground.
Market participants are still digesting comments made yesterday by Fed Chairwoman Janet Yellen to the Economic Club of New York. Ms. Yellen’s comments appear to be considered quite dovish judging by market reaction today. In her commentary, the Chairwoman reiterated the notion that the central bank will take it as it comes regarding interest rates and that the pace of any further hikes would likely be gradual. She cited slow global economic growth and other factors as risks to the U.S. economy. Clearly, the Fed does not want to be overly aggressive with further rate hikes at this time as moving too quickly could stop growth in its tracks while making investors anxious.
Following recent labor market data some believed another hike could be seen from the Fed as early as next month. Ms. Yellen’s comments yesterday, however, have likely put that issue to rest.
The idea of lower rates for longer is likely helping to fuel the buying being seen in stocks thus far today. Crude oil may also be getting a lift in part because of the dovish commentary. In addition, the dollar index is seeing some moderate selling today that may also be driving buying in stocks and some commodities.
Investors are now looking forward to Friday’s latest employment report. Earlier this morning, investors got the latest reading on the ADP employment report which showed an addition of 200,000 private sector jobs. While this number can diverge from Friday’s number, it could potentially indicate a decent amount of jobs added last month. The nonfarm payrolls data could be a significant factor in any decisions by the Fed regarding interest rates and will therefore be closely scrutinized by investors. A number below expectations could give the Fed further reason for pause regarding interest rates, while a stronger than expected number could potentially fuel more hawkish sentiment.
After seeing another significant dip from recent highs, silver is trying to gain some footing. It appears thus far that dips are being bought, however, the market’s failure to advance beyond recent highs could become a source of concern for the bulls. A move beyond recent lows could potentially indicate a change in near-term trend and could potentially see increased selling pressure.