Market Overview: Gold and silver are both higher in early trade to kick off the new trading week. The precious metals complex remains lacking any fresh, bullish catalyst, however, and any upside could potentially be limited. This week will be a busy one with both corporate earnings announcements and a heavy dose of economic reports. Although a December interest rate hike by the Fed seems to be a foregone conclusion at this point, many of the key data points to be released this week have the potential to be market-moving and could also potentially fuel debate about a December hike if any significant misses are seen.
Key Data Points: Investors will get the latest reading on PMI Manufacturing Index Flash today. Consensus estimates are looking for a reading of 51.2. The gauge is expected to remain soft, and some are citing the upcoming Presidential election as a possible cause as many large decisions could be put off until after the election.
There are also a couple Fed officials speaking today at various engagements.
Investors will have plenty more to digest the rest of the week, with the latest readings on GDP, Weekly Jobless Claims, Durable Goods Orders, Consumer Sentiment, MBA Mortgage Applications, Consumer Confidence and more set for release.
Outside Markets: Stock index futures are pointing to a higher open today. Equities have been going somewhat sideways recently, and could potentially be gearing up for a year-end rally.
Crude oil is lower in early action but remains above the $50 per barrel level.
The dollar index is slightly lower this morning, and any dollar weakness will be welcomed by gold and silver with open arms. The dollar has likely been a major thorn in the side of precious metals recently, and further upside in the greenback could potentially be seen.
The Big Picture: Gold and silver have stabilized-at least for now-but remain in need of fresh bullish inputs. Dollar strength and an overall lack of risk aversion have not done these markets any favors, and any near-term rallies may be limited barring any new developments. Gold and silver could remain vulnerable to another sell-off, and any significant declines from current levels could present bargain hunting opportunities for long-term investors. The next few weeks could potentially see some added volatility with the Presidential election quickly approaching, although precious metals may make more of a sustained directional move once investors know who will be in office.
