Gold Opens Higher Amid Relatively Quiet Macroeconomic Week
CyberMetals | Jun 06, 2023 09:31
Good afternoon, traders; welcome to our market week preview, where we take a 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.
Shortly after US cash markets opened, gold prices made tentative steps higher after trading relatively flat through the overnight sessions to start the week.
We find markets in a kind of limbo this week, between last Friday’s blockbuster NFP number and next week’s pivotal FOMC meeting, and with precious little to come in terms of relevant macroeconomic data. Although US stocks seem to already be on the front foot, led higher by one of its largest-cap names— Apple— and expectations of another big day, gold prices (via reaction functions to the US Dollar and Fed expectations) will likely spend this week at the mercy of investor sentiment as the market continues digesting last week’s +300K payroll number in the context of the Fed’s next move.
h3 US Economic Data to Watch/h3Monday, June 5 at 10 am EDT // ISM Non-Manufacturing Index (May)
[consensus est.: 52.2 // prev.: 51.9]
After last week’s ISM survey on the manufacturing side of the US economy landed more or less bang on the consensus’ expected number, investors and economists have relatively little reason to expect a positive or negative miss on the service-sector variant. Here, again, it feels like there is a little more downward pressure on gold prices, and potentially US stocks, as another print above the 50.0 expansion/contraction break-even can be interpreted as tacit approval for the Fed to continue hiking rates, even next week if it feels otherwise compelled to do so. Of course, that the most recent numbers have the survey index hovering just above 50.0 does make it feel like there’s “more to lose,” and possibly more upside for gold prices as well— if the number were to flirt with (or fully fall into) a contractionary reading, this would be a stronger argument for a “Fed pause” next week, an event that would certainly offer a tailwind to gold and other Dollar-denominated commodities.
Thursday, June 8 at 8:30 am EDT // Initial Jobless Claims
[consensus est.: +235K // prev.: +232K]
With little on the macro-data docket this week, and in the wake of yet another “surprise” blowout NFP number last week— a surprise only in the technical sense that it far exceeded the published consensus projection for the primary monthly metric regarding the US labor market— we may see some increased scrutiny on the number of new unemployment claims reported this week, which would likely drive a bit more volatility around the US Dollar and, as a result, US stocks, and gold prices.
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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 for another week ahead.
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