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 on the price of gold this week and beyond, as well as other key correlated assets.
Gold prices are starting another week on the front foot, with spot markets moving higher in early-Monday trading. Should the yellow metal continue consolidating the gains of the last two weeks, or else carry this momentum forward, investors will look for the next level of resistance at $1800/oz.
Given where we are on the calendar, this could end up being an odd week with most of the sessions feeling largely inert as we drift through the summer doldrums, with large components of the active market has gone on vacation and set their stops for a week or two; but there will be one point of focus and—probably—volatility smack in the middle of the week when the fresh numbers on consumer inflation in the US economy hit the wires. It may be the case that we see the majority of this week’s trading activity come through on Wednesday morning, and then head back to the beaches. Prepare accordingly.
For now, let’s take a look at the rest of the calendar ahead.
US Economic Data to Watch
Wednesday, August 10 at 830am EDT // Consumer Price Index (Jul)
[(core CPI) consensus est.: +6.1% YoY // prev.: +5.9%]
[(headline CPI) consensus est.: +8.7% YoY // prev.: +9.1%]
It looks as though the annualized “core CPI” number will be an outlier, coming in above the prior month’s data; the rest of the top-line numbers for this week’s consumer inflation update are expected to bring back the “inflation has peaked!” argument-slash-wish with numbers that step down from June’s report. In the case of the all-in headline numbers (monthly and YoY,) the stepdown should be tangible thanks mostly to recent drops in energy prices. Most likely, this could be a rough print for gold prices as it dampens the threat of persistent inflation, the fear of which has certainly been key to support for gold (when it can be found) in recent weeks. On the other hand, it would support the theory that the Fed will cooldown its aggressive tightening and hiking cycle, which will improve gold’s case as an investment over the medium term. This release will be the biggest (scheduled) market news in a week that is already looking sparsely attended in the middle of summer (read: low liquidity.) The best bet for any traders—but certainly in the gold market—will be to prepare for volatility.
FedSpeak this Week
The dance card for Fed officials making public appearances this week isn’t crowded or star-studded, but after the past few weeks’ actions and commentary from the FOMC and last Friday’s big labor market beat, investors are scratching for any reliable signal regarding the next steps that the central bank is looking to take in September and through the rest of 2022.
Wednesday: Chicago Fed President Charles Evans (non-voter) (11 am EDT); Minneapolis Fed President Neel Kashkari (non-voter) (2 pm)
Thursday: San Francisco Fed President Mary Daly (non-voter) (730pm)
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.
