Market Overview: Gold and silver are both moving slightly lower today in light holiday trade. With many traders and investors on vacation for the holidays, the precious metals markets may be at or near the levels with which they end the year. Although the gold and silver markets have seen some significant declines in recent weeks since the November Presidential election, better times could potentially lie ahead for these key metals in 2017.
Key Data Points: Investors will get the latest reading on the Pending Home Sales Index later this morning. Consensus estimates are looking for an increase of .5 percent.
Markets will still have a couple of other pieces of economic data to digest this week, with the latest readings on Weekly Jobless Claims and Chicago PMI due for release.
Outside Markets: Stocks are slightly lower in light action today, and appear poised to finish out the year on a high note. The recent move higher in equities has been significant, and could very well continue into the New Year.
Treasuries are slightly higher today, with bonds and notes seeing a little bit of buying interest. The recent sell-off in the bond market has seen interest rates rise sharply in just a few short weeks, and it remains unclear if the selling is over.
The dollar index is higher once again today, and appears poised for further upside. The stronger greenback has likely been a major factor in the selling in gold and silver, and further strength could potentially fuel even more selling in the precious metals complex.
The Big Picture: Although price action this week may be on the lackluster side, markets have made some very powerful and significant moves heading into the end of the year. The “Trump” rally has fueled appetite for risk while driving selling in perceived safe haven assets such as gold, silver and treasuries.
While the current rally could potentially extend well into the New Year, markets will be looking for some rapid signs of progress once the new administration takes office. It remains unclear exactly what economic policies may actually be implemented, and the potential for some degree of disappointment does exist.
Gold and silver are likely to remain on the defensive for the near future, but could potentially be nearing a bottom. 2017 could potentially see a great turnaround for these metals, and prices could potentially be significantly higher by the end of the New Year.
This market update is provided weekly with analysis. You can always check the gold and current silver prices by watching our on-site charts.