June 4th Early Week Silver Market Update

Gold and silver both dropped most of Mondays substantial gains in the early morning hours of Tuesday, building on precious metals’ recent volatile nature. Even though the end of Monday saw gold finish above the $1,400 mark by quite a bit, by a little after 9 AM it was right back into the $1,390s. Some weak US and European economic data prompted value buying yesterday and that was likely the main cause behind precious metals’ gains.

OECD Report

The OECD, or Organization for Economic Cooperation and Development, made an announcement that inflation throughout the most highly developed countries fell to over 3 year lows in April. This report will likely only add fuel to the fire that is the central banks across the globe pumping money into their economies at alarming rates.

The Consumer Price Index rose by only 3 tenths of a percentage point over one in April, compared to a 1.6% annual rise this past March. It is generally agreed upon that a rise of the CPI anywhere under 2% is inconsequential and thus should not be worried about.

Other World News

On Tuesday the European Union announced that producer prices fell by a little over half of a percentage point this past April. This most recent decline is the largest such drop off in producer prices in almost half of a decade. This news will add to the intrigue and speculation circling around the upcoming meeting of the European Central Bank which is set to take place this upcoming Thursday.

Another big reason behind gold’s early morning decline is the fact that the USD Index is coming in a bit stronger today than it was yesterday, when it hit near 4 year lows. On Tuesday we are expecting a retail sales report as well as a trade deficit report which have the ability to influence the precious metals markets one way or another.

What Else to Watch For

As stated earlier, investors around the globe will be anxiously awaiting the European Central Bank that is set to take place on Thursday. On Friday of this week a US unemployment report will be the focal point for investors and market watchers.

Other than these two reports later in the week there really isn’t any huge headlines upcoming in the next few days.