The recovery of iShares Silver Trust (SLV) came to halt after the non-farm payroll showed a higher than expected gain in number of jobs added to the U.S. economy. This week’s JOLTS report and the ECB’s TLTRO are among the key events that could move the needle for SLV investors.
The recent non-farm payroll report came at a higher than expected figures with 321,000 jobs added during November while the rate of unemployment remained unchanged at 5.8%. This news may have contributed to the rally of the U.S. dollar mainly against the yen and the fall of SLV. The table below presents the relation of the changes in the labor market and the reaction of the SLV on the day of the release of the non-farm payroll.
Even when I extend the sample for the past several years, the correlation between the changes of the month to month number of jobs added and SLV remained at a strong negative correlation. Also, the correlation between the deviation from expected growth to reported growth in number of jobs and SLV is strong negative. These findings suggest, at face value, when the report comes higher than expected or higher than the previous month or both, the price of SLV tends to fall. Why is that?
For the rest of the report you can see it at Seeking Alpha