Silver prices are moderately lower this morning in subdued trade. This week has been extremely quiet in the silver market, and it seems that market participants may be simply waiting for any further catalyst before making a move in the market. In fact, silver has traded in a range of less than $.40 for the week thus far.
The markets have had some data to digest thus far this week including ISM Non-Manufacturing, PMI Services and International Trade. This morning markets will hear commentary from Fed Chairwoman Janet Yellen before the Joint Economic Committee in Washington. As is usually the case, investors will likely pay close attention to Ms. Yellen’s remarks looking for any potential clues as to the Fed’s thoughts on the economy and its plans for monetary policy going forward.
Tomorrow we will see the release of the weekly jobless claims data, and various Fed officials will be speaking tomorrow and Friday. All in all, the economy continues to show signs of improvement, and it is expected that the Fed will hold its current course of pulling back on stimulus while holding rates at low levels for the foreseeable future.
The situation in Ukraine continues to be a source of concern for global markets-although looking at recent price action it does not necessarily appear that way. Panic in markets has not set in by any means, and perhaps investors are willing to be patient with the situation in the hopes that a peaceful, diplomatic solution may be found. This crises may help keep a floor under silver and gold prices for the time being, and could potentially drive precious metals much higher should a large escalation be seen. On the other hand, it seems that if the situation begins to deescalate the silver and gold bulls may potentially throw in the towel and we could see some widespread selling in the metals complex.
The ECB will hold its monthly policy meeting tomorrow. The Euro has continued to strengthen, and further Euro strength could be beneficial to silver and gold. Markets will be watching closely, as the Euro Zone has been grappling with deflationary pressures and a slowing economy. In addition, the higher Euro is something that is likely a cause for concern for the ECB-and it’s possible that the central bank may undertake stimulus measures in order to try and boost the economy while weakening the Euro Currency.
For now, silver seems very comfortable back in its previous trading range from the $19 to $20.50. While we don’t expect this range to last forever, markets can stay range bound for very long periods of time. Perhaps that is exactly what we may see in silver prices for the foreseeable future.