Morning Snapshot: Gold defensive, silver on the ropes ahead of Fed policy statement

USAGOLD/Peter Grant/05-03-17

Gold is edged to a new 3-week low ahead of today’s Fed policy statement. That announcement comes at 2:00ET and while no change in actual policy is anticipated, the market will be looking for clues as to the Fed’s intentions for the next meeting in June.

Silver has extended to the downside, convincingly negating support at 16.80. That puts silver at a 14-week low and the gold/silver ratio has probed above 75; nearly a 1-year high. These losses seem to be a result of the unwinding of the reflation trade as the Trump agenda seemingly has stalled.

The ADP employment survey for April came in at +177k, below expectations of +185k, versus a negative revised +255k in March (was +263k). April nonfarm payrolls is out on Friday, with median expectations running at +188k. The unemployment rate is expected to tick up to 4.6%.

Markit services PMI and services ISM are out later this morning. EIA data for last week are out as well, which may add to oil’s woes.

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