Gold: $1,228.14 -6.38
Silver: $15.49 -0.09
April 1st Mid-Week Market Update
Article By: Matt Zeman on April 01st, 2015

Silver prices are moving slightly higher in early trade on Wednesday. After moving nearly a dollar lower from last week’s high, the silver bulls are trying to regain their footing.

News this morning is the ADP employment report. The ADP report said 189,000 jobs were added in the month of February. The 189,000 jobs is far below the consensus estimate of 230,000 jobs. While the ADP employment data does not always closely track the government’s labor report, this morning’s data will likely lower expectations for Friday’s non-farm payrolls data.

The miss today could add to volatility before the close tomorrow as markets will be closed Friday for Good Friday. Investors will not have a chance to react to Friday’s jobs report until Monday, which could be very interesting if the data is a miss. Consensus estimates are looking for an increase of 247,000 jobs with the unemployment rate steady at 5.5 percent.

In other data set for release today, investors will get the latest readings on construction spending, manufacturing PMI, MBA mortgage applications, motor vehicle sales and crude oil inventory. Stocks are headed lower thus far this morning while crude oil is slightly higher.

There has been much ongoing discussion about the Fed and its plans with regards to interest rates. Since the last Fed meeting in which the central bank dropped the word “patient” from its language, the notion of the Fed raising rates in June or September has gathered steam. The central bank was very careful, however, to also state that just because this word was dropped does not mean that the Fed won’t be patient. In fact, the central bank reiterated that the decision to hike rates will be based on economic data, and that any rate hikes will likely be small and incremental.

Friday’s jobs data could potentially cause the Fed to decide the economy is ready for higher rates, or on the other hand if it’s a large miss it could potentially give the Fed reason to pause. In that regard, even a miss could potentially cause buying on stocks, while a solid number may make investors more apprehensive about the potential for higher rates.

Silver appears to be comfortable in its current trading range. The bulls cannot seem to take prices out of this range to the upside, while the bears have thus far been able to make a new low. Silver, like gold, appears to be lacking a significant bullish catalyst. While physical demand has remained robust, silver could potentially stay range bound for some time until more clarity surrounding the pace of rate hikes and other issues such as Greece is seen.