After reaching its highest levels in almost a month, silver reversed and ended sharply lower on Wednesday. Safe havens such as gold, silver and the Japanese yen were pressured as risk appetite was fueled by upbeat news on US/China trade relations.
At the NATO summit on Tuesday, President Trump suggested that a trade deal with China might not be finalized until after the 2020 presidential election. The comments sent shockwaves through the markets and stocks tumbled. However, confidence was lifted after Bloomberg reported on Wednesday that the US and China are moving closer to a "phase one deal."
Meanwhile, ADP and Moody’s Analytics reported on Wednesday that private payrolls increased by only 67,000 in November. The figure missed estimates of 150,000 and marked the slowest growth since May, casting a shadow on the employment report due for release on Friday. The weaker than expected data gave a brief respite to safe-haven assets. Mark Zandi, chief economist for Moody’s Analytics stated:
“The job market is losing its shine. Manufacturers, commodity producers, and retailers are shedding staff and job creation slowed across all company sizes. Openings are declining and any further slowing in job growth will push up unemployment.”
On Friday, the US Bureau of Labor Statistics is scheduled to release the employment report. The US unemployment rate is expected to hold at 3.6%, near to its lowest level in 50 years. The key non-farm payrolls figure is expected to come in at around 187,000. Weaker than expected data on Friday could shift risk sentiment and underpin silver and gold.
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