Gold: $1,227.55 -6.97
Silver: $15.50 -0.08
July 2nd Mid-Week Market Update
Article By: Matt Zeman on July 02nd, 2014

Silver prices are seeing a slight push higher this morning while gold prices are also marginally in the green. Markets saw some reaction earlier this morning to the ADP jobs report in which ADP reported a whopping increase of 281,000 jobs versus an unrevised May number of 179,000 jobs. Consensus estimates were looking for an increase of 213,000 jobs. It is important to note, however, that while the ADP report clearly beat expectations handily, it does not necessarily mean that tomorrow’s U.S. Department of Labor’s non-farm payrolls data will beat expectations to the same degree-or even at all.

While these reports can “jive” at times, other times the ADP report has shown significantly different results than the non-farm payrolls report. If this is in fact a sign of what is to come tomorrow, stocks could see good buying pressure going into the weekend. On the other hand, should this be the case, gold and silver may see some profit taking and long liquidation heading into the long weekend. Factory orders have also been released this morning, and showed a dip for the month of May that was slightly greater than estimates.

Concerns over falling prices in the EU and some weakness seen in Chinese data continue to give investors something to think about. Looking at stocks, however, investors do not appear to be too concerned. The SP 500 still looks poised to try and print the 2000 handle, and thus far the market is simply not showing any real signs of a reversal.

Crude oil prices seemed to have calmed down a bit-at least for the time being. Oil has thus far not been able to test the $100 per barrel mark. In fact, the oil trade looks pretty crowded and should oil begin to falter there could potentially be many longs running for the exits at the same time potentially causing a large drop in prices. Stronger stocks and weaker crude oil are not likely going to do the silver bulls any favors. Of course, it is quite possible that oil stays elevated given the current geopolitical landscape.

From a technical perspective, silver has been making higher lows during this consolidation phase. Yesterday’s high of $21.275 remains near term resistance. Beyond that, the $21.66 area would possibly be the next near term target for the bulls while setting their sites on the $22 level. Trade above the $22 level could potentially set the stage for significantly higher prices in silver during the coming weeks and months.