Good afternoon, traders; welcome to our market week preview, where we look at the economic data, market news, and headlines likely to have the biggest impact on the price of gold this week and beyond, as well as other key correlated assets.
As the market mood pivots back to expectations for continued hawkishness and hikes from the FOMC, with the US Dollar rallying in response, gold prices have slid back to the key market level of $2000/oz on Monday.
Here, at the outset of the week, strong signals from corporate earnings season have mostly protected US stocks from what would otherwise be a negative signal. That said, the gains across the major indexes are only marginal on Monday, so it looks likely that a continuous flow of good news will be needed to keep them above the chop.
US Economic Data to Watch
Thursday, April 20 at 8:30 am EDT // Initial Jobless Claims
[consensus est.: +240K // prev.: +239K]
We end up with one week like this, out of roughly every six, where the economic calendar is so light that the only point worthy of focus (besides the commentary from FOMC officials) is the weekly update of new unemployment claims. The number isn’t just fluff this week. The March jobs report— which still printed an objectively strong number for the labor market— does show signs of returning to Earth, if only because it didn’t wildly outperform expectations. As a result, we may see added scrutiny around the Initial Claims reading this week from investors looking for more circumstantial evidence for the case for early FOMC concessions. For gold’s pricing functions, this doesn’t muddy the waters. A miss to the downside on this data should upset the apple cart in a way to boost gold buying— even if stocks move higher at the same time.
FedSpeak this Week
Monday’s market is already demonstrating that the driver of most directional trading— for gold and the Dollar in particular— in this “light” week will be investors’ efforts to divine the Fed’s next move. For the first session of the week, a still-hawkish FOMC is in the lead position, hence the resurgent Dollar and gold’s dip below $2000/oz. Whether that remains the state of play, with little in the way of key economic data on offer, will depend in a big way on the public commentary from Fed officials this week.
Tuesday: Fed Governor Michelle Bowman (FOMC voter) (1 pm EDT)
Wednesday: Chicago Fed President Austan Goolsbee (FOMC voter) (5:30 pm); New York Fed President John Williams (FOMC voter) (7 pm)
Thursday: Cleveland Fed President Loretta Mester (FOMC voter) (12 pm); Dallas Fed President Lorie Logan (FOMC voter) (3 pm)
And that’s how the week lays out ahead of us, traders. As always, I wish you all the very best of luck in your markets in the coming days, and I’ll look forward to seeing you all back here next week.