Market Overview: Gold and silver are seeing some selling pressure in early trade today as global stock markets continue their ascent. Stocks are once again in fresh all-time high territory, and the Dow looks set to finally hot the elusive 20,000 level. The Trump administration has been active this week, signing orders to move forward with a key oil pipeline and removing the U.S. from the Trans-Pacific trade deal among other things. Today, it is expected that Trump will issue directives on immigration.
Key Data Points: The latest reading on MBA Mortgage Applications showed both new home purchase activity and refinancing rose last week. This was despite mortgage rates resuming their uptrend with the average conforming 30 year mortgage rate rising 8 basis points to 4.35 percent.
Other major economic announcements set for release this week include Weekly Jobless Claims, PMI Services Flash, New Home Sales, Leading Indicators, GDP, Durable Goods Orders and Consumer Sentiment. Friday’s GDP data could potentially keep the Fed on hold a bit longer or could potentially give the central bank reason to hike again sooner rather than later.
Outside Markets: Stocks continue their ascent as the Trump administration has sprung into action. Although details concerning Trump’s fiscal spending plans have not been seen yet, the administration has already taken action on several key issues. Investors will likely show patience with the new administration, as implementation of new policies does not happen overnight.
The dollar index is moving slightly lower in early trade today and has thus far not been able to mount a challenge to its post-election highs. The dollar index is, in fact, showing some signs of a top being put in.
Bonds and notes are falling again today as risk appetite remains high and interest rates resume their uptrend.
The Big Picture: For the time being, it appears that risk appetite remains quite robust and stocks could potentially have further room to run to the upside. With progress being made by the new administration, investors may feel more confident about the economy and Trump’s plans for boosting it. Strong appetite for risk could potentially weigh on gold and silver, although these metals have thus far remained quite resilient in the face of higher stocks and higher rates. Today’s selling in gold and silver could potentially be nothing more than profit taking after the recent upside in the metals.