Market Overview: Silver and gold prices are moving lower this morning in early action as the dollar rallies and investors square positions ahead of this afternoon’s FOMC
meeting minutes release. Price action may be choppy until the minutes are released and could potentially see some volatility following the minutes. Any further clues as to the pace and timing of interest rates could potentially have a significant effect on the
precious metals markets.
Key Data Points: This morning, investors were able to scrutinize the latest data on MBA Mortgage Applications. Unfortunately, the report pointed to a loss of momentum in
the housing market with applications for home purchase mortgages declining.
The most significant data point of the day and perhaps week will be today’s latest FOMC meeting minutes. Today’s minutes could be especially significant and potentially market moving. Following last month’s jobs data, more doubt had seemingly crept into the marketplace about the possibility of a June rate hike.
Some recent data and Fed official commentary, however, could potentially mean a June hike is still on the table. Indications of a June hike could potentially weigh on precious metals and drive buying in the dollar index, while a more dovish sounding Fed could possibly send both stocks and precious metals higher.
Outside Markets: The dollar is likely having an impact on silver and precious metals today. While off its earlier highs, the dollar index is moving higher thus far today and is
trying to distance itself from recent lows. An indication from the Fed that a June hike could take place could potentially fuel short covering and more fresh buying in the dollar index.
Crude oil is flat today, and with some analysts now looking for higher prices could potentially keep moving higher. A key test of the $50 per barrel level is likely in store in the coming sessions, although any dollar strength could possibly weigh on crude.
Equities are higher this morning and appear to be trying to hold recent lows. While it is too early to tell, the stock market is showing some signs of weakness and a larger scale correction could be in store. Ongoing weakness in data out of China could potentially support silver and other precious metals while weighing on global stock markets.
The Big Picture: The silver market remains in an uptrend, although recent bullish momentum has stalled. Silver, like other markets, is likely awaiting more clarity on the
potential pace and timing of additional interest rate hikes by the Fed. The silver market does appear to have put in a longterm bottom at this point, however, and dips in the white metal are likely to be viewed as buying opportunities unless a return to the previous trading range is seen.