Market Overview: Both silver and gold are moving slightly lower in early action on Wednesday. In a week rich with economic data as well as speaking engagements by various Fed officials, investors are trying to gauge the likelihood of a December interest rate hike from the central bank. As it stands, Fed Funds futures are pointing to about a 75 percent chance of a December rate hike by the Fed. This could still potentially change, however, if any significant misses are seen in the data stream. The Employment Situation report for October could make it or break it when it comes to a December hike, and investors will be paying close attention.
Key Data Points: Investors got the latest reading on MBA Mortgage Applications this morning which showed a decline of 4.1 percent. Purchase applications dropped a seasonally adjusted seven percent last week, to the lowest level seen since January. Refinancing applications declined by two percent.
New Home Sales will be released later this morning. Consensus estimates are calling for a reading of 601,000.
PMI Services Flash is also set for release later this morning.
Investors will still have plenty of data to chew on the rest of the week, with the latest readings on GDP, Weekly Jobless Claims, Pending Home Sales Index, Durable Goods Orders and more set for release.
Outside Markets: Equity index futures are pointing to a lower open this morning as investors digest recent earnings announcements and outlooks as well as the economic data stream. Stocks remain in a relatively tight range and have thus far not been able to mount another attempt at previous highs.
The dollar index is slightly lower today on what may simply be some profit taking and back-and-fill trade. The greenback has been moving higher in recent trade, and could potentially be on the verge of a significant leg higher. The recent dollar strength has likely been a significant factor in silver and gold’s lack of upside.
The Big Picture: With precious metals still lacking any fresh bullish inputs, investors will remain focused on the fast-approaching Presidential election. Although polls appear to be pointing to a Hillary Clinton victory, things can and do change quickly. The election could fuel some additional safe haven buying as uncertainty over the outcome, as well as uncertainty over each candidate’s geopolitical and economic agendas potentially weighs on risk appetite. Outside of the election, investors will remain focused on the Fed and any further guidance that may be seen regarding interest rates.