Posted on March 31, 2017
Market Overview: Both gold and silver are trading slightly lower in very quiet trade to cap off the trading week. The metals are seeing some profit taking following recent gains and may also be paying attention to the current rebound in the dollar index. After a short bout of selling and volatility, the stock market appears to remain on relatively solid footing which may keep any upside in the metals limited.
Key Economic Data: The latest reading on Chicago PMI today came in at 57.7, above consensus estimates of 57. The report points to ongoing strength in production.
The latest reading on Consumer Sentiment showed a slight dip in the gauge, with a reading of 96.9. Consensus estimates were looking for a reading of 97.6.
There are also a couple Fed officials speaking at various engagements today.
Outside Markets: Markets are relatively quiet today across the board. This should not come as a major surprise, as today is the last day of the trading month and quarter.
Stocks are trading just slightly lower, while the bond market is also seeing a very minor dip today.
Stocks appear to have stabilized, and as of yet there does not appear to be any significant signs of a looming sell off. The recent selling in stocks may simply turn out to be a buyable dip although the market does remain vulnerable to further selling pressure on negative headlines.
The dollar index has broken back above the 100 level, and could potentially weigh on the metals complex with further strength.
The Big Picture: Investor sentiment remains upbeat, although last week’s non-vote on the repeal of the Affordable Care Act may have done some damage to the Trump administration’s agenda. The failure to find the necessary votes to repeal the ACA could potentially fuel concerns over the administration’s ability to pass other key pieces of legislation such tax reforms or a fiscal spending package. Given the fact that these issues were a major running point during the Trump campaign, a lack of follow through on these issues could potentially set the stage for a significant shift in investor sentiment and a corresponding sell-off in risk assets.
The path of least resistance in gold remains higher-for now anyway-although the metal’s inability thus far to break out above recent highs may be a cause for concern and could potentially lead to more selling.