Market Overview: Precious metals are off to a slow start this morning, with gold moving slightly lower and silver moving slightly higher. There has not been much in the way of new bullish developments to fuel buying in gold and silver, and the metals almost seem adrift right now with a bias to the downside. Investors will continue to monitor the data stream, looking for more certainty about the potential for a December interest rate hike from the Fed.
Key Data Points: Investors will get the latest readings on Empire State Manufacturing and Industrial Production today.
The latest reading on Empire State Manufacturing showed a decline of -6.8 percent. Consensus estimates were looking for a reading of 1.00. A reading above zero indicates expansion while a reading below indicates contraction. The reading points to a decline in business activity.
Also due out later this morning, Industrial Production is expected to show a reading of .2 percent. This gauge did not show much activity for August, and September is expected to show only a small rebound.
In what could potentially be the biggest data point of the day, Fed Vice-chairman Stanley Fischer will speak to the economic club of New York. His comments could potentially provide further clues on the timing of the next rate hike by the Fed, and the pace of any additional rate hikes.
Outside Markets: Stock index futures are pointing to a slightly lower open today. Treasuries are moving higher out of the gate today as yields decline, while the dollar index is seeing a little selling to start the week.
Crude oil is basically flat and continues to maintain trade above the $50 per barrel level.
The Big Picture: Gold continues to lack any fresh bullish catalyst that could fuel more buying and get the market out of its recent downside funk. The market could possibly see further selling before finding a more sustainable bottom. The notion of higher rates as well as a stronger dollar index are likely weighing heavily on the yellow metal, and unless a dollar reversal is seen or there are indications of the Fed holding off on another rate hike, gold may remain vulnerable.
That being said, there are a number of potential issues that could potentially fuel buying in gold including further weakness or volatility in Chinese markets, further negative headlines for Deutsche Bank or more discussion of a recession being seen in the next 12-18 months.
