Silver Prices Today Breaking Lower Ahead of Fed Meeting
New York (Jan 28) What’s causing the big hit in silver prices today? U.S. stocks are building on their rally after consumer confidence reaches 80.7 in January, the highest since August. Investors are also nervous as the Fed’s two-day gets started today. Analysts expect the Fed to continue tapering with another $10 billion cut in monthly bond purchases.
According to the Conference Board, consumer confidence rose more than 3 points in January to 80.7, up from 77.5 in December. It’s was the second month in a row showing strong gains. Conference Board economists Lynn Franco says the rise in consumer confidence points to possible upward momentum for the economy in the first part of 2014.
Earnings Season Continues
Along with better consumer confidence, earnings season is also helping push stocks higher. Out of the 153 companies in the S&P 500 that have reported so far, nearly 70% of them have reported earnings above estimates. 68% have reported revenue that beat estimates. How does this effect silver prices? Well, better earnings season usually translates to a higher stock market. That keeps investors in equities and away from safe haven plays such as gold and silver. Add in another probable taper and commodity investors are taking some off the table today.
For tomorrow, the Federal Open Market Committee will release their statement at 2 PM. Another $10 billion taper is expected and we’ll see how the market responds to it. On Thursday, jobless claims will give us some indication on how the labor market is doing.
Silver prices are down 1.3% at $19.53/oz. The metal briefly broke the $19.50 market and hit $19.46 in before bouncing back. It looks like $19.50 is acting as support for today. Let’s see if it holds as the trading day continues.