The stock market remains volatile, and S&P 500 futures are losing ground in premarket trading after strong performance on Friday. It looks that investors remain worried about higher inflation and the potential reduction of Fed’s asset purchase program ahead of employment reports which will be published in the second half of the week.
Today, traders will have a chance to take a look at Factory Orders report which is projected to show that Factory Orders increased by 1% month-over-month in August. It remains to be seen whether this report will have a significant impact on market dynamics as traders are mostly focused on general market sentiment.
All Eyes On OPEC+
WTI oil is currently trying to get above the $76 level as traders wait for the results of the OPEC+ meeting. Previously, some reports indicated that OPEC+ countries may agree to increase production by 800,000 barrels per day (bpd) in November to deal with the energy shortage ahead of winter in the Northern Hemisphere.
However, recent reports suggest that OPEC+ has not reached consensus and may follow the original schedule, which means that it will increase production by 400,000 bpd in November. This scenario is bullish for the oil market as demand continues to increase at a healthy pace despite the spread of the Delta variant of coronavirus.
Precious Metals Pull Back Despite Weaker Dollar
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has managed to settle below the 94 level and is testing the next support at 93.75.
Interestingly, weaker dollar failed to provide any support to precious metals. Gold faced strong resistance at the 20 EMA at $1765 and returned to the $1750 level while silver is testing the support at $22.30.
Treasury yields have started to move higher and put pressure on gold and silver. In this environment, gold mining stocks will likely move closer to yearly lows at the start of today’s trading session.