Gold: $1,234.22 1.12
Silver: $15.60 0.01
March 5th Mid-Week Market Update
Article By: Matt Zeman on March 05th, 2014

Silver prices are not doing much of anything today as stocks also trade flat and oil moves slightly lower. The dollar index is flat as well.

The situation in Ukraine continues to dominate the headlines. Stocks made new all time highs yesterday as tensions in the region appeared to ease quite a bit. This situation is not likely to go away quickly, however. It is quite possible that silver and markets in general will be very headline driven until a longer-term solution is found. Unfortunately, with a situation like this, things can turn on a dime. Investors will continue to pay very close attention to the ongoing crises as it unfolds, and will likely not be afraid to sell risk assets if more risk aversion sets in. Perhaps the notion of tough economic sanctions has caused Russia to rethink its position. The Russian economy is already quite fragile, and any further weakness could be very difficult for the Russian economy to swallow.

As the situation in Ukraine quiets down a bit-at least for now- investors are likely to turn their attention again to domestic economic concerns. The ADP employment report was released this morning and showed an increase of 139,000 jobs while consensus estimates were looking for an increase of 150,000. Does this foreshadow weakness in Friday’s non-farm payrolls data? Perhaps but not likely. Weather is being blamed for the lower-than-expected number and does not appear to be causing much concern for investors.

Consensus estimates for non-farm payrolls data on Friday are an increase of 150,000 jobs with the unemployment rate steady at 6.6%. While weather issues may cause this number to miss expectations, it does not appear at this point that a slight miss would cause risk assets to sell off. IN fact, should this number beat expectations, we could see another leg higher in stocks assuming the situation in Ukraine remains stable.

After an upside range breakout in recent weeks, the follow through in silver prices has been somewhat disappointing. Silver needs to get above resistance at the $22 level in order to attract fresh buying interest. The trend remains up on the daily chart, however, it appears to be weakening and is in danger of rolling over. Should the situation in Ukraine improve, it is possible that silver will come under more pressure as risk aversion wanes and investors again look for yield. The previous breakout level of $20.50 appears to be key support in silver, and silver prices may attempt to hold above this level for the foreseeable future.;