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    JM Bullion Weekly Market Review (10/21/16)

    Market Overview: Both gold and silver are moving slightly lower in early, uneventful trade. Gold did see a bit of an upside breakout this week, however, it remains to be seen if prices will be able to sustain any type of significant ascent. With the U.S. Presidential election quickly approaching, gold may see some good support as some investors may potentially look for perceived safe havens. In fact, the yellow metal could potentially rise no matter who wins the election, as either candidate will introduce some degree of economic and geopolitical uncertainty.

    Key Data Points: There are no major economic announcements set for release today. There are, however, a couple Fed officials speaking at various engagements. These speeches are not likely to be market-moving.

    Outside Markets: Stock index futures are pointing to a lower open this morning as investors digest some recent earnings, a higher dollar index and the upcoming Presidential election. The S&P 500 has not made a new high in some time now, and the longer the index remains this close to new highs without making any new highs, the greater the volatility that might be seen if the market breaks down.

    A stronger dollar may also be having an impact on the equities markets, as the dollar index continues its ascent and is currently trading at the highest levels since last March. The notion of a rate hike in the U.S. along with Brexit fears pressuring the British Pound could be enough to keep buying in the greenback going for the time being. Further upside in the dollar could potentially weigh heavily on gold and precious metals, and is likely already having an impact on prices.

    The oil market continues to maintain trade above the key $50 per barrel level, which could potentially be supportive for stocks. Further dollar upside could, however, limit any further gains in crude.

    The Big Picture: While the likelihood of a December interest rate hike remains high, there have been some bumps in the road seen in recent data. In fact, some analysts have suggested that the central bank will not act this year, and 2016 will have come and gone with no further increases in the Fed Funds rate. While such a scenario could potentially be bullish for gold, the gold market could be poised to move higher even with a rate hike. The reality is that rates are not likely to move far from current levels any time soon, and ongoing stimulus measures by other global central banks may be seen as supportive for gold.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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