Market Overview: Both silver and gold are seeing some buying interest in early action today as some technical buying is featured and as some key outside market action is supportive. Gold and silver have not been able to mount and sustain any significant rallies in recent action, and perhaps today’s upside could be the beginnings of a more sustainable move back to the upside. The precious metals have been lacking any fresh bullish inputs, however, and technical buying may only take them so far. Without any fresh bullish catalyst, any rallies in the complex may potentially be short-lived.
Key Data Points: MBA Mortgage Applications this morning showed a seasonally adjusted gain of three percent, while refinancing applications showed a decline of one percent. Mortgage rates remain not far from record lows, although rates have risen to the highest levels since June.
The latest reading on Housing Starts showed a figure of 1.047 M while consensus estimates were looking for a reading of 1.18 M.
This afternoon, investors will get the latest data from the Fed’s Beige Book. This report could potentially be market-moving, and could possibly temper interest rate expectations or further the case for a rate hike sooner rather than later.
Outside Markets: Stock index futures are pointing to a slightly higher open this morning. While the market has seen some selling in recent action, it has yet to really breakdown and some analysts believe a year-end rally is likely in the cards.
Stronger crude oil may be a positive for the stock market, as oil continues to maintain trade above the $50 per barrel level. This could also potentially be seen as being bullish for silver and gold.
The dollar index is slightly lower today in early trade and has seen some consolidation in recent days. The greenback could potentially be nearing a short-term top, and if that is the case the precious metals markets may possibly benefit from a reversal in the dollar index.
The Big Picture: After seeing some steep declines recently, the silver market appears to have found a bottom-at least for now. An ongoing lack of any fresh bullish inputs, however, may keep any rallies limited in nature. Investors will likely continue to monitor the data stream for any further clues about the timing and pace of further rate hikes, and more bargain hunters may see current levels in silver and gold as good long-term entry points. Without any fresh bullish catalyst to fuel a rally, the silver market may focus on the dollar index, the Fed and overall risk appetite.