March 6th Weekly Silver Market Update

For yet another day this week, precious metals spot values are trading down, even if by only marginal amounts. On the whole, the past 5 trading days have been quite adversarial to precious metals as spot values were chipped away with each passing day. There was a good bit of economic data made public throughout the week, but few pieces of data were more closely-watched than today’s US Labor Department non-farm payrolls report.

In addition to economic data from the United States, this week has also played host to a few surprise moves made by global central banks. In all reality, the moves made this week should not come as much of a surprise at all considering the battles currently taking place between global central banks. For the USD Index, however, all these central bank battles are working in the greenback’s favor.

USD Index Holds Near 12-Month High for Two Straight Days

One of the week’s big news stories came on Wednesday and Thursday when, over the course of two days, the USD Index hit two consecutive 11.5 month highs. Rallying against a number of rival currencies, the USD is looking increasingly appetizing to currency investors. As the Dollar outperforms most other global currencies, it is clear to see that the greenback is also taking its toll on spot values.

Having lost momentum each and every day this week, gold and silver spot values are sporting weak technical posture and are, quite honestly, looking like they will sink even lower before all is said and done. Crude oil isn’t doing metals any favors either, as the raw commodity has more or less stagnated around the $50/barrel mark. The fact that crude oil is not really moving is acting and has acted as a weight dragging down all raw commodities. If this continues, you can bet that precious metals’ spot values will continue to suffer.

Highly Anticipated Employment Data from the US

There has been a lot of economic data made public this week, but few are being more highly touted than today’s release of the latest non-farm payrolls report for the month of February in the United States. Employment data for the US is always deemed to be important, but after the first few months’ worth of employment data for 2015 fell short of expectations, investors are more keenly paying attention to February’s figures.

Prior to the release of the data, most investors had expected that non-farm payrolls rose by 240,000 during the month of February. This somewhat conservative estimate was expected to be beaten handily, and that would not bode well at all for gold and silver.

China’s Central Bank Switches Up Monetary Policy

China, the world’s second-largest economy, has been the center of a lot of attention in recent months simply because their impressive economy cannot seem to get on track. In an effort to spur economic activity and growth, the Chinese Central Bank announced last weekend that they would be slashing interest and deposit rates by .25% apiece.

What’s more, the same central bank announced later in the week that they would also be loosening the reins on loans to businesses in hopes that businesses will borrow more and subsequently spend more. Finally, on top of all of this, China’s Prime Minister was quoted on Thursday as saying that the overall expectations for GDP growth during 2015 has been reduced from 7.5% to a flat 7%. Though the reduction was disheartening and a bit bearish for precious metals, it is important to keep in mind that the amount of growth expected by China is much greater than that expected by most other global economies. For instance, any European country would be ecstatic to see 7% GDP growth, but as we all know, that will likely not be a reality for anyone in Europe anytime soon.