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 other key correlated assets.

Gold prices are starting the week with some elevation on Monday morning. Having held steady after the Sunday evening open saw Treasury yields moving quickly higher alongside bonds globally (another sign that gold may be less susceptible to hawkish signaling from the Fed,) gold has risen steadily in the hours since equity markets in Europe opened with a slump.

US inflation data, due Tuesday, looks to be the focal point of the data docket this week, with investors and analysts seemingly resigned to see that the FOMC’s first 0.25% has had little impact against rising price pressure so far, and looking for more confirmation that the central bank will act more aggressively in May and at subsequent meetings through the summer.

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

US Economic Data to Watch

Tuesday, April 12 at 830am EDT // Consumer Price Index (Mar)

[(core CPI) consensus est.: +6.6% YoY // prev.: +6.4%]

[(headline CPI) consensus est.: +8.4% YoY // prev.: +7.9%]

Hyperbole is a writer’s regular tool, to be sure, but at this point it really does seem as if the overall and the core CPI numbers would have to get abruptly cut in half for Tuesday’s data to not be interpreted, or reported on, in a way that maintains the current level of inflation concern in the US economy (at the very least.) As it stands, it’s pretty unlikely by all reasonable projections that consumer price inflation will be shown to have fallen sharply in March, if at all, given that the supply chain and manufacturing constrictions resulting from the ongoing war in Ukraine, not to mention the impact it’s had on raising energy prices substantially will likely have negated any early progress that the Fed’s first rate hike could have made. Gold prices, then, probably will come through the CPI release with the same tailwind that has been a major boon to the yellow metal in recent weeks, consolidating price gains even has interest rates—current and projected—elevate higher. 

Thursday, April 14 at 830am EDT // Retail Sales (Mar)

[consensus est.: +0.6% MoM // prev.: +0.3%]

The expectations for retail sales growth from the month of March look fairly run-of-the-mill this time around, and as such are unlikely to have major influence over the US equity or US Dollar markets (or by connection to the Greenback, gold prices)—assuming, that is, that the headline numbers come in roughly as anticipated. Gold might be more impacted by a big surprise to the upside, however: A stronger month of retail growth than expected could (at least briefly) do a lot to quell inflation fears, muting what has been gold’s most reliable tailwind since February.

Thursday, April 14 at 830am EDT // Initial Jobless Claims

[consensus est.: +173K // prev.: +170K]

Spring 2022 has seen the weekly rate of new unemployment claims finally (although somewhat dependent on revisions) fall consistently below 200,000. Providing that reads like this Thursday’s continue the trend, analysts and Fed watchers will take it as a signal that the US labor market recovery is still running hot enough to support the FOMC hiking rates aggressively. (With the timing of the calendar, we actually won’t get the April Jobs report before the next Fed decision.) In the coming weeks there might be enough added attention on Initial Claims data to impact the gold market (through the US Dollar index, most likely,) but with Retail Sales printing at the same date and time this week it will probably be tough to point to market moves driven specifically by the claims number.

FedSpeak this Week

It’s a deep lineup of FOMC officials with speaking engagements on the schedule this week, and appearances by the more prominent members of the Fed’s policy-setting committee may garner extra attention after it was remarks from Fed Governor Lael Brainard that seemed to dominate the core of the trading week. With investors and analysts looking to the updated inflation numbers to further confirm expectations for a big rate hike in May, the market is likely to be more reactive to the remarks that follow and the Q&As where officials may be asked to comment on the data.

Monday: Atlanta Fed President Raphael Bostic (non-voter,) Fed Governors Michelle Bowman & Christopher Waller (FOMC voters) (930am EDT); Chicago Fed President Charles Evans (non-voter) (1240pm)

Tuesday: Fed Governor Brainard (FOMC voter) (1210pm)

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.