Market Overview: The precious metals market is mixed this morning, as gold inches higher while silver inches lower. Both silver and gold are still trying to find some more solid footing following the recent (and surprising to many) selling in the aftermath of a Trump victory. Overall risk appetite remains high, as investors appear to be more optimistic about the economy moving forward. Mr. Trump has discussed significant infrastructure spending, and such an increase in government spending could mean jobs and other potential benefits for the economy. As of right now, however, it remains unclear how the President-Elect plans on increasing spending while lowering taxes. Clearly it would seem that the budget deficit is to be put on the back burner.
Key Data Points: The latest reading on MBA Mortgage Applications this morning showed a decrease in both purchase applications as well as refinancing activity. This decrease could seemingly be attributed to the sharp rise seen in mortgage rates recently.
The latest reading on PPI came in softer than expected, registering an unchanged reading month-over-month, with the reading minus food and energy actually showing a decline of .2 percent.
The latest reading on industrial production showed levels were unchanged. Consensus estimates were calling for an increase of .1 percent.
The latest reading on the Housing Market Index is due for release later this morning.
Outside Markets: Stocks are slightly lower this morning and may simply need a bit of a breather before possibly extending the recent rally.
Bonds are slightly higher this morning as the treasury market attempts to stabilize. Some analysts have suggested that the recent sell-off in treasuries has been overdone. Thus far, however, bonds and notes have not been able to put together any type of rally.
The dollar index is almost certainly having a significant impact on gold and silver, as the greenback attempts to break above its recent trading range and into territory not seen since the early 2000s.
The Big Picture: While gold and silver have been hit hard in recent trade, silver could potentially find more buyers at current levels as there could potentially be an increase in industrial demand for the white metal. If risk appetite remains elevated while the dollar continues its ascent, however, the precious metals complex could potentially have a difficult time putting together any sustainable rally. At this point, recent market action could potentially be overdone until more details are known about economic plans going forward.