Market Overview: Both silver and gold are seeing some very small gains today following yesterday’s rout. The selling seen in these precious metals is the subject of some debate. Although the dollar index was moderately higher yesterday and there was some hawkish talk from Richmond Fed President Jeffrey Lacker, the amount of selling seemed to be exaggerated. There has been some speculation that some larger players in the market simply through in the towel after the market was not able to sustain the recent rally, and others have even questioned whether Deutsche Bank possibly selling gold had something to do with it.
Key Data Points: The latest reading of the ADP Employment Report showed a jobs rise that was slightly below expectations. The report showed 154,000 jobs added while consensus estimates were looking for an addition of 170,000 jobs. This report could potentially provide some clues about Friday’s Employment Situation Report, although the two reports have also been known to vary significantly.
MBA Mortgage Applications were slightly lower from the previous week, while refinancing activity rose by five percent from the prior week. New applications, however, declined by 14 percent from the same week last year.
The PMI Services Index came in at 52.3 for September, up from the August reading of 51.
The latest readings on Factory Orders and ISM Non-Manufacturing will be released this morning, as well.
Outside Markets: The dollar is slightly lower today after seeing solid gains yesterday. The dollar strength seen yesterday was likely largely attributed to the falling British Pound, which sank to a 31 year low as the plans for Brexit get under way. This issue may remain in the headlines for some time to come, and could keep the Pound under pressure.
Stocks are moderately higher today and have remained in a relatively tight range. Stock investors may simply be in a holding pattern, waiting to see if the Fed does move forward with an anticipated rate hike in December.
Crude oil is approaching $50 per barrel ,and oil strength could potentially be a positive for both stocks and precious metals.
The Big Picture: Silver and gold appear to be lacking any fresh bullish catalyst, and in the absence of such a catalyst it is not surprising to see prices decline. The outlook for the metals may still remain constructive, however, and any dips in silver under the $18 per ounce level might be viewed as a solid buying opportunity for long-term investors.