Market Overview: Both gold and silver are seeing further selling pressure today as ongoing interest rate hike fears take a toll. Markets are calmer in early action today, following steep losses in stocks on Friday. September and October has seen heightened stock market volatility at times in the past, and the notion of a rate hike this year could potentially give stock investors reason to take profits. Gold and equities, as well as other key markets, will continue to be vulnerable to increasing volatility as markets weigh the possible implications of a September or December rate hike.
Key Data Points: There are no major economic reports set for release today. Investors will, however, likely pay attention to commentary from several Fed officials today including Atlanta Fed President Dennis Lockhart, Minneapolis Fed President Neel Kashkari and Federal Reserve Governor Lael Brainard.
The rest of the week, investors will look forward to the latest readings on MBA Mortgage Applications, Weekly Jobless Claims, PPI, Retail Sales, Empire State Manufacturing Survey, CPI, Consumer Sentiment and more.
Strong data may reinforce the Fed’s plans on raising rates while any significant misses could potentially give the central bank something to consider.
Outside Markets: Stocks are moving higher today following sharp losses seen in Friday’s session. Markets are grappling with the idea of an imminent rate hike from the Fed, and further volatility could potentially be seen as such a change in policy approaches.
Crude oil is a bit higher in early action as well, also attempting to bounce back from steep losses seen on Friday.
The dollar index is losing ground this morning, although not much. The dollar could potentially see a degree of volatility today as investors digest commentary from several Fed officials.
The Big Picture: As has been the case for some time now, markets are focused primarily on the Fed and its plans regarding interest rates. It seems the central bank is fairly intent on hiking, and markets could experience further volatility if/when the next hike takes place. Gold has been on its heels the last several sessions, although the market has held up fairly well given the hawkish rhetoric being seen. While the market may see further selling once the central bank does tighten again, the real test in the near-term will be whether or not the market can bounce back quickly from such a move. Given the likely slow and incremental pace of any further hikes, gold investors may seek to buy on any further dips in price.
