Good morning, 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.
Gold prices are opening the week at a crossroads, within touching distance of five-month highs in the spot market.
The yellow metal rode another strong tailwind through the Asian markets on the back of news that jolted the crude oil market (and the rest of the core commodities basket) higher. The temporary peak for gold was softened, this time by reports of concessions by the Chinese government aimed optimistically at calming the tension that gave gold its Sunday-night drive last week.
We’ll keep an eye on these and other developing headlines this week as potential drivers for trading in gold, the Dollar, et. al; as you can see below, the docket for economic data this week is slight, with economists and investors turning their attention to next week’s FOMC meeting.
US Economic Data to Watch
Monday, December 5 at 10 am EST // ISM Services Index (Nov)
[consensus est.: 53.5 // prev.: 54.4]
The ISM’s Manufacturing PMI report—effectively covering “the rest” of the US economy—came in as gloomy as expected, marking the first month of contraction in the sector (a reading below 50.0) since the Covid safety lockdowns of 2022. We would have expected this to have a more obvious, destabilizing impact on markets last week. Still, it appeared to get rolled up into the market’s enthusiasm for Fed Chairman Powell’s implication that the central bank may tap the breaks in December—both were positive signals for the gold market as it briefly regained $1800/oz. This week’s service-sector read is less likely to have an impact, given the low odds of the headline number missing so badly as to dip below the breakeven at 50. Still, with an otherwise bare cupboard of economic data this week, we’ll keep an eye on possible outliers like this that could impact investors’ risk aversion (and, as such, their level of interest in gold.)
And that’s how the week lays out ahead of us, traders. (Really, that’s all!) As always, I wish you all the best of luck in your markets in the coming days, and I look forward to seeing you all back here on Friday for our market-week wrap-up.