Market Overview: The gold and silver markets are mixed in early action following the release of the latest Employment Situation report for November. These precious metals have been trying to find a bottom since the Trump rally in stocks began following the Presidential election earlier this month. Although gold and silver have not been able to put together a significant rally as of yet, it appears that selling interest in these metals may be starting to wane. Although a December interest rate hike from the Fed is seemingly a foregone conclusion, perhaps these metals will benefit from “sell the rumor buy the fact” type of trade and begin to rally once the central bank actually takes action.
Key Data Points: In the data highlight of the week, the U.S. Department of Labor reported the country added 178,000 jobs in November while the unemployment rate dipped to 4.6 percent. While at first glance these numbers seem impressive, not all parts of the report were rosy. 178,000 jobs added is a decent figure, although the unemployment rate can be a bit misleading. The rate declined not so much due to employment growth but rather to a dip in the participation rate.
Although the doves may now have some bargaining chips, it would seem that this report would not deter the central bank from hiking rates later this month.
Outside Markets: Stocks are slightly lower following the non-farm jobs report and may be running out of gas. The Trump rally in equities has been swift and powerful, but it appears that perhaps markets have gotten ahead of themselves and some back and fill trade might be seen. Analyst calls for higher stocks seem to be on the rise, and while equities may in fact continue their ascent higher, stocks may need to see some type of pullback before mounting another sustainable leg higher.
The dollar index is slightly lower following the jobs data and remains not far from recent highs.
Treasuries are moving slightly higher as yields see a small decline. Rates have continued to rise overall, however, although treasuries may also potentially need a pullback before mounting another leg lower in price.
The Big Picture: The last few weeks since the Trump election victory have seen some powerful market movement. Markets rarely, if ever, move straight up or down, however, and some reversals may be seen in the near future. Sentiment surrounding gold and silver has gotten more and more bearish, in what could potentially be another sign pointing to a possible near-term bottom.
