Market Overview: Both gold and silver are moving slightly lower in early trade today as investors digest the latest Employment Situation report. The clock is now rapidly ticking towards the highly anticipated Presidential election, which at this point appears to be a very tight race. Donald Trump has closed the gap significantly in the last two weeks, and the tighter the race is the more anxious investors and markets may become. Although a Trump victory could potentially fuel market volatility and a flight to safety, a Clinton victory or disputed Clinton victory could also potentially be market-moving. With such differences between the two candidates, all eyes are on the election right now while the Fed, Brexit and other issues have taken a backseat.
Key Data Points: The key Employment Situation report for October has been released,and showed the country added 161,000 jobs last month. Although this figure was below consensus estimates of 178,000, it does point to decent job growth. The unemployment rate ticked down slightly to 4.9 percent. Net revisions higher for August and September were also made, and average hourly earnings were shown to be on the rise.
All in all, this report would seemingly further pave the way for the Fed to raise interest rates in December.
There are also several Fed officials speaking today at various engagements.
Outside Markets: Stock index futures are pointing to a slightly higher open this morning, although action could potentially be quiet ahead of next week’s election. Crude oil is once again declining, and oil may potentially start becoming more of a drag on stocks and risk assets.
Bond rates are seeing a slight decline this morning, while the dollar index is moving higher. The greenback has been moving lower in recent trade, and could possibly see some volatility as the election approaches.
The Big Picture: Right now it’s all about the election and the potential uncertainties that come along with it. While some have suggested that a Trump victory could potentially fuel panic and selling in risk assets, the fact is that a Clinton victory could also potentially fuel uncertainty. Gold could possibly see strong buying if Trump wins the election, although the yellow metal could also potentially benefit from a Clinton victory, as well.
With the election coming down to the wire, gold could potentially see increasing buying interest and could be vulnerable to some large swings in price.
