Silver prices are moving lower today as stocks trade slightly higher, crude oil falls and the dollar index hovers around the unchanged mark.
The precious metals appear to be headed for more of the same — essentially sideways price action as investors await more inputs. Although the price of silver nearly reached the $18 per ounce level in recent weeks, the bulls have once again not been able to put together any meaningful follow through.
With inflation levels still benign, and thus far no Greek default, one has to wonder what a potentially bullish catalyst for silver might look like.
Silver may very well be waiting for the Fed to take action before staging a breakout or breakdown. As the potential timing of a rate hike from the central bank approaches, markets will be watching the data stream very closely. This week is fairly busy from a data standpoint, and will end with the largest economic report of the week in Friday’s non-farm payrolls data.
Consensus estimates are looking for an increase of 220,000 jobs with the unemployment rate steady at 5.4 percent. A better-than-expected number could potentially seal the deal as far as a rate hike goes, while a disappointment could possibly fuel further speculation that the central bank may remain on hold until next year. A good number may weigh on precious metals, while a miss could possibly drive buying in silver and gold.
The ongoing negotiations between Greece and its creditors are coming down to the wire. With the country’s bailout package extension set to expire at the end of the month, the two sides are working diligently to try to come up with a deal.
Ongoing progress reports remain mixed, however. There is talk of Greece defaulting on a payment due to the IMF this Friday unless a deal appears to be close. Some are speculating that this notion is based on the fact that the country simply does not have the funds to make the payment. Whatever the case may be, time is running out for a deal to be struck. Although precious metals and markets in general are not showing too much concern over the potential for a default yet, that could change in a hurry should one occur.
While silver may continue to see some lack of upside, it may see only limited downside until there is more clarity surrounding Greece.