The mindless mood swings continue regarding the upcoming FOMC meeting, which concludes on Wednesday. Today many markets once again overreacted to the scantest “hawkish” data release, that of the Consumer Price Index for August.

We were treated not to just a raft of soft U.S. data but a flotilla of it. Initial jobless claims were steady, representing the only positive news on the day.

Although nothing spectacular was achieved, gold, silver and U.S. equities found firmer footing today. The VIX volatility index reflected the situation, falling 3.50%, close to the 17.00 mark, after having zoomed up from 12.00 to 18.00 in the previous five days.

A week from today, the Federal Open Market Committee opens its September meeting. It will report out its action or inaction the next day (September 21). The jitters have begun yet again.

Fundamentally speaking,, gold should have been bid up strongly today. Instead, it found its momentum almost wholly from a weaker dollar. Generally, when Fed interest rates seem likely to hold steady or drop, non-interest-bearing instruments like precious metals should rise in value.

The old adage “buy on the rumor, sell on the fact” was turned on its ear today as rumors fueled the tanking of gold and silver; equities in the U.S. and Europe; and crude oil.

Call it sentiment. Call it mood, or a sixth sense. Sometimes traders and investors act out in strange and wondrous ways.

Let’s try to make sense as to why the entire precious metals complex fell hard today led by silver, which was off not quite 1.00%. Gold was also off – by 0.60%. A gyrating dollar is having some impact on the precious metals but that was scarcely the bigger problem.

After the release of the Federal Reserve’s 12-district, July-August “Beige Book,” one might have expected a strong upward movement in gold and silver. That was not to be.

Instead, we saw mild profit-taking combine with a slightly higher U.S. dollar to pressure the precious metals. On the equities side, the reaction was also essentially one of lethargy.

The dollar tumbled after a poor showing in data released by the Institute of Supply Management. The data reflected the slowest growth in six-plus years in the service sector. That, in turn, lowered expectations for an interest-rate hike by the Federal Reserve. Of course, that depressed the dollar.

The big news today governing fundamentals was the fair-to-middling jobs report issued by the U.S. Department of Labor.