March 9th Mid-Week Market Update |
Gold: $1894.81 -16.71
Silver: $23.61 -0.97
March 9th Mid-Week Market Update
Article By: Chelsea Mies on March 09th, 2016

Silver is trading around the unchanged mark today as stocks and crude oil rally while the dollar index declines. Stocks are moving higher today as members of OPEC have agreed to meet in Moscow on March 20th to discuss a production freeze agreement. Such a move could potentially cap oil production and in turn help to curtail the market’s current state of oversupply.

Higher crude oil prices today are likely the primary driver of buying being seen in equity markets. While stocks have seen a little selling taking place early this week, the potential for crude oil prices stabilizing or even rising is putting investors at ease today and driving risk appetite. This increase in risk appetite may potentially weigh on silver and precious metals.

Markets will turn their attention to the highly anticipated ECB meeting taking place tomorrow. It is expected that the central bank will push rates further into negative territory in an attempt to drive economic activity. While such stimulus measures may potentially be bullish for silver and gold, the move could potentially weigh on the euro while boosting the dollar. Dollar strength has the potential to weigh on silver and precious metals, and investors may be sitting on the sidelines today ahead of the ECB announcement.

After reaching the $16 per ounce level recently, silver saw a steep pullback back down to $14.60 or so and then rallied again back up to over $15.80. The market has seen some heightened volatility in recent weeks, and despite some of the recent selling, the bulls still appear to have the upper hand.

It is possible that investors are awaiting more commentary from the Fed regarding its outlook on interest rates. While rate expectations have changed in recent months, the recent strength seen in the labor market may keep the central bank on track for further hikes this year. Debate continues, however, as to the timing of further hikes and how many may be seen this year.

The silver market could take another crack at the $16 per ounce level in the coming weeks, and a break above this level could potentially fuel further fresh buying interest. Like gold, the silver market is showing some renewed signs of life and appears to be seeing buying interest on any dips in price. While this could potentially continue, a decline in silver prices back below the recent lows could possibly see selling strengthen once again. The market may need to see a breach of $16 sooner rather than later to keep the bulls interested.