Silver plunged on Thursday amid growing uncertainty over the future of Feds stimulus program. Key U.S. labour data on Thursday and Friday will give an insight into the economys health, which will play a big role in determining later during the month whether the stimulus program must be scaled back earlier than intended or not.
On the Comex division of the New York Mercantile Exchange, silver futures for July delivery slipped 0,21% on the day at 9:12 GMT and traded at $22.425 a troy ounce.
The ADP Employment Change indicator on Wednesday mismatched forecasts and showed a less than expected gain in hired workers. The index stood at 135 000, less than the 165 000 expectation, but still more than the revised value of 113 000 for the preceding month.
U.S. Initial Jobless Claims, due at 12:30 GMT, is supposed to bring some preliminary data about the labour market in the world’s biggest economy. Later on Friday, Change in Non-Farm Payrolls, Average Hourly Earnings and the Unemployment Rate will shed some light on the health of the U.S. economy, thus dampening or sharpening expectations about Fed’s monetary stimulus program.
Investors’ market moves have been largely tracking news on the Quantitave Easing as it’s a key factor for dollar’s strength. And since all dollar-priced commodities are determined by the greenback in an inverse relation, key U.S. economy indicators, when mismatching forecasts, tend to cause wide fluctuations on the commodities market.
Market players are also looking ahead into the European Central Banks meeting, due later in the day. No changes in the base interest rate are expected, but any unexpected values will cause fluctuations in the EUR/USD cross. This will strengthen or weaken the greenback, thus forcing commodity prices in the opposite direction.
Elsewhere on the New York Mercantile Exchange, gold futures for August delivery rose 0.07% on the day and stood at $1 399,45 per troy ounce at 9:32 GMT, after it previously had crossed the psychological barrier of $1 400. Gold prices are strongly influenced by expectations of the key U.S. labour data, due on Thursday and Friday, as well as news from India about the Reserve Bank of Indias gold import restrictions.
Platinum and palladium are both down for the day. Platinum July futures sank 0.22% today and stood at $1 507,30 an ounce at 9:32 GMT. Palladium futures for September delivery traded at $753.60 at 9:28 GMT, tumbling 0.38%.
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