GoldPrice.

Good morning, 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 the price of gold this week and beyond, as well as market prices for silver, the US Dollar, and other key correlated assets.

After a US market holiday on Monday, the full trading week has kicked off with headlines out of Ukraine having moved in the direction that nobody wanted: closer to out-and-out armed conflict and invasion by Russia. Global equity markets were roiled in what trading there was on Monday, and the key global commodities have been moving higher, propelled by either worries of sudden scarcity, or their own value as safe havens. This has seen gold prices, after some choppy trading when the barrier was initially broken, settling into the US trading session above $1900/oz and looking to consolidate.

For now, let’s take a look at the rest of the calendar ahead.

US Economic Data to Watch

Tuesday, February 22 at 10am EST // Consumer Confidence (Feb)

[consensus est.: 110.0 // prev.: 113.8]

With a very sparse economic data calendar and a short week, we can put brief spotlight on data points that don’t often draw our attention (at least for as long as the newsflow around the Ukrainian border allows us.) Measures of consumer mood have been getting more interesting lately, as fears about persistently high inflation rates—but also fears about the impact to “market value” of the Fed’s constrictive efforts to push that same inflation lower—weigh on the US consumer’s outlook. The odd divergence that many economists are looking at now is the split where measurements like “Consumer Sentiment” have dropped severely, but retail sales growth has risen sharply over the same time series. The line can’t be pulled in both directions forever, so with reads like Tuesday’s Consumer Confidence data, watchers will try to project whether the pace of consumer spending can hang on long enough for consumer confidence to recover (which could easily lead to a spending boom in the US economy,) or whether consumers’ worry and gloom eventually pulls “hard numbers” like Retail Spending lower and drops the economy into a real slump; Combined with still-high inflation, this would likely be the more bullish scenario for gold prices.

Thursday, February 24 at 830am EST // Initial Jobless Claims

[consensus est.: +235K // prev.: +248K]

Between the more acute reality that (we assume) markets will still be too focused on the geopolitical risks in Eastern Europe to be overly concerned with high-frequency labor market data, and the farther-reaching impact of January’s door-buster of a Jobs Report, we think it would be a reach to expect much of a market reaction, even for gold, this week. That said, we’re continuing to keep an eye on them as they remain stubbornly stuck near the 250,000 level. 

Friday, February 25 at 830am EST // PCE Price Index (Jan)

[(core PCE) consensus est.: +5.2% YoY // prev.: +4.85%]

[(headline PCE) consensus est.: +6.0% YoY // prev.: +5.79%]

At least as far as economic data points go, the bottom line for Friday morning is that we will see headlines reporting “another” data set representing inflation at (or near) 4-year highs in the US economy. Typically, the reaction of money managers and (to a less reliable degree) private investors is more subdued when PCE number comes around, as they’re really only re-analyzing numbers we’ve already received from CPI, PPI, and other sources for the same period. As sensitive as markets have been to news around inflation (gold markets included), we can’t rule out a more tangible reaction than usual this week. Given history, recent and longer-term, we can expect to see investor attention on high-inflation headlines to drive gold higher against the US Dollar and other assets. 

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 on Friday for our market-week wrap up.