Silver prices are not doing much of anything today as markets have all been awaiting today’s FOMC minutes release. Markets have appeared to be in somewhat of a holding pattern this week as investors awaited today’s Fed minutes and are still looking forward to Fed commentary from Jackson Hole, Wyoming on Friday.
Today’s FOMC minutes release did not appear to have much of an impact on markets. Gold is moderately lower while silver prices are a touch higher. Stocks are moving higher once again and still do not really show any signs of letting up. Bonds and notes are not doing a whole lot on the release either. The dollar index, however, is stronger today and continues to rally. In fact, the greenback has staged an upside rally this week that could potentially see the buck go much higher from here. Needless to say, this is not a bullish development for precious metals.
The FOMC minutes showed that the Fed is for now intending to stay the course on stimulus withdrawal. Some members of the Fed also appeared to be more upbeat on employment, while other members felt that the labor market still shows underlying signs of weakness. All in all, it seems the Fed still remains concerned about the economy and that it may not mess with interest rates anytime in the near future. The Fed did agree to use interest rates on excess reserves as the main tool for setting the fed funds rate in the future. The Fed did not give any time table as to future rate hikes, and many still believe that the first hike will not come until the middle of next year. The minutes did appear to be a bit more on the hawkish side, as if the Fed is laying the groundwork for a rate hike potentially coming sooner than expected. Fed Chairwoman Janet Yellen is due to give a speech on Friday about the labor market, and her comments could potentially reinforce today’s hawkish tone.
Silver and precious metals remain on the defensive. Silver has not been able to climb back above the $20 level. A firm downtrend is now in place in silver prices, and additional downside may be seen without some type of fresh bullish input. The metal appears to want to retest the $19 level, and should this area not hold silver could potentially run to the $18.70 area. Over the last year, this level has proven to be support for the silver market. One has to wonder, however, how many times it can hold before giving way to lower prices.