Gold and silver spot values are edging higher through the early morning hours of Thursday. The biggest news of both today and this week was the European Central Bank’s monthly policy meeting, which wrapped up earlier this morning. The meeting went as expected but has not had an expected outcome on the spot values of gold nor silver. Now, as we head towards the last day of the week, the market’s attention will shift to the US non-farms payroll data for May.
This week has been a fairly busy one thus far and, apart from this morning, has been generally adversarial to precious metals. While it looks now like things are beginning to change, there is no guaranteeing that gold and silver’s minor gains made this morning will be sustainable over the next coming days and weeks. As investors digest today and tomorrow’s data, it will be interesting to see in what direction gold and silver will head.
European Central Bank Introduce Fresh Stimulus, As Expected
Shortly after markets opened today it was announced that the European Central Bank did, in fact, introduce new monetary stimulus to the European Union. This move was widely expected by the market after deflationary pressures have been plaguing much of Europe for the last year or more. Officially, the ECB announced that they would be reducing the refinancing rate by 10 basis points and also introducing a -.1% deposit rate. Also as expected, the news caused the euro currency to drop to a more than 4-month low while simultaneously giving the Dollar even more strength.
What wasn’t expected, however, was the surge gold and silver would end up making. Now, as gold is up by nearly 10 dollars and silver is up almost 25 cents, it is looking as though the precious metals market had factored in the ECB’s decision ahead of time. As the wider marketplace continues to digest today’s data, it will be interesting to see whether metals can hold on to or even build upon these gains or if they will fall right back down to where they were through Tuesday and Wednesday of this week.
Finally, rounding out the week is tomorrow’s non-farm payrolls data for May. If tomorrow’s data is any resemblance of the ADP employment report we saw a day ago, gold and silver may receive yet another boost to close out the week.