Market Overview: Gold and silver are seeing some slight selling pressure today as risk appetite is on the rise and as some earnings reports have stock investors encouraged. Markets are also cheering on some recent economic data as they await the results of tday’s latest FOMC meeting. The Trump administration and its recent immigration ban remain a strong subject of debate, and the ongoing disagreement over the executive order has the potential to escalate further and fuel risk aversion.
Key Data Points: The ADP employment report this morning was significantly higher than consensus estimates. In fact, according to ADP the country added 246,000 private sector jobs while consensus estimates were looking for just 168,000 jobs added. This report could potentially bode well for Friday’s non-farm payrolls report, which is expected to show 175,000 jobs added with the unemployment rate steady at 4.7 percent.
The latest reading on PMI manufacturing came in with a reading of 55.0.
ISM Manufacturing came in stronger than expected, with a reading of 56.0. This report has come in better than consensus estimates were calling for in the last several reports.
The latest MBA Mortgage Applications data showed a decline in both new purchase applications as well as refinancing.
Investors are looking forward to this afternoon’s FOMC meeting conclusion and announcement. Although no action is expected from the central bank today, investors will be looking for clues as to the timing and pace of further hikes from the Fed.
Outside Markets: Stocks are rising today on the back of strong economic data and solid corporate earnings. The dollar index is also moving higher today and yields are on the rise, as well.
The Big Picture: Investor appetite for risk remains on the high side, and stocks could potentially see a fresh challenge to previous highs if the economic data stream stays solid and earnings do not disappoint. That being said, markets are also vulnerable to headline risk, and thus far the Trump administration has generated plenty of headlines. Further protests, lawsuits or other major discord could potentially fuel risk aversion in the marketplace, and could potentially drive selling in stocks and risk assets while powering a rally in gold, silver and other perceived safe haven assets.
Although prices are lower today, silver remains in an uptrend and could potentially challenge the $18 per ounce level soon if investors become risk averse or if the Fed appears more dovish regarding further rate hikes.