silver prices correct higher for small gains ahead of major US data

• Silver prices correcting higher ahead of major economic data on Friday in US Nonfarm Payrolls.
• Trade talks on track although investors holding out for US data, US benchmarks close with small gains.  

Ahead of a major data release from the US economy, Silver prices were correcting from the $16.80 lows and rose to a high of $17.02, ending on Wall Street +0.62%. Meanwhile, the US and Chinese trade-deal headlines continue to stream through.

The price of silver has been elevated at times of risk-off, tracking its sister metal, gold, favoured for their safe-haven qualities and liquidity in financial and commodity markets at times of uncertainty. In more recent sessions, the US dollar has also ben a factor, weakening due to recent disappointing US data. In its fourth straight sub-50 reading, the Institute for Supply Management said its manufacturing index sank to 48.1% in November from 48.3% in October. Not only did this rattle investor nerves and fuel the precious metals, but it sank the US dollar, exacerbating the rallies in gold and silver. 

Nonfarm Payrolls in focus for precious metals

This leads us to Friday's Nonfarm Payrolls report and draws even closer scrutiny from the financial markets – it will be important in assessing momentum in the US economy, risk appetite,  the price of precious metals and the US dollar.  "The strength in the labour market has been fundamental to it holding up well this year in the face of manufacturing weakness and trade uncertainty," analysts at ANZ Bank explained. 

"The median expectation is looking for a rise of 184k, up from 128k in October. This is one of the highest estimates this year preceding a payrolls report. For what it’s worth, November non-manufacturing jobs and initial claims over the survey week point to a stronger number than October. However, the ADP report was considerably weaker. None have a particularly strong track record."

Trade talks on track, according to both Beijing and Washington

Meanwhile, recent trade news, a Wall Street Journal article was doing the rounds which stated that China and the US remain at odds over the value of farm goods Beijing will buy. However, the good news is that there is an official statement from Beijing which confirms that China’s trade negotiations with the US remain on track.

China’s Commerce Ministry said Thursday that the negotiating teams from both sides have maintained close communication, though it didn’t provide details on progress. The recent strain had spooked investors and stoked concerns over the global economic outlook,

the article leads. 

This news followed earlier headlines in the day whereby US President Donald Trump said that the US is having meetings and discussions with China, describing the meetings as ‘going well’ and said that "something could happen regarding 15th Dec tariffs, but we are ‘not discussing that yet’.

The overall headlines lead to small gains on Wall Street for which precious metals are negatively correlated with: 

• S&P index rose 4.94 points or 0.16% at 3117.69, below the 3119.45 highs, up from a low of 3103.76.
• NASDAQ index rose 4.031 points or 0.05% at 8570.70, below the high of 8588.88 and off the low at 8541.91
• Dow industrial average rose 29.36 points or 0.11% at 27679.14, below the 27745.2 and up from a low of 27562.80.

Silver levels