Gold and silver were able to post gains for the first time in more than a week on Wednesday, but were turned right back around on Thursday thanks to a more valuable US Dollar and a lack of any major bullish news. As it sits currently, market bears are in control and apart from some isolated bargain-hunting, sellers are dominating.
This week has been loaded with US economic data, but up until now none of it has had any real impact on the spot values of gold or silver. Having said that, the market is awaiting March’s non-farm payrolls data which is scheduled to be released on Friday. Today, however, all eyes are on the European Central Bank who just recently finished up their latest policy meeting.
ECB Holds Position, Deflation Concerns Grow
Even before this week, even before this month for that matter, there were a growing number of investors who began to become concerned with regard to deflation across the EU. On Wednesday, those concerns intensified due to the most recent producer price index report. According to the report, the EU’s PPI had declined by .2% in February and was down by almost 2% on an annualized basis. This year on year decline was the largest such dip in the EU’s PPI since 2009. The PPI report only served to inflate the importance of today’s ECB meeting, which ended up having more of an uneventful outcome.
The ECB, with full knowledge of the growing concerns with regard to deflation, chose to maintain current interest level rates and refrained from initializing any new monetary stimulus measures. ECB president, Mario Draghi alluded that monetary stimulus is not out of the cards, just not not necessary at the present moment in time. The euro currency declined in the wake of the ECB’s decision as the US Dollar made strong gains against it. The stronger US Dollar only worked to put more pressure on gold and silver spot values.
Tomorrow’s non-farm payrolls data is perhaps the most highly anticipated piece of data released this week and will have the full attention of the marketplace. The market is currently expecting to see about 200,000 non-farm payrolls added to the US economy in March, though small deviations in either direction are expected as well.