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.
Gold prices are lagging on Tuesday morning, under some pressure from its correlation with a rebounding 10-year yield (which has returned to 1.8% and higher during light Monday trading) and investors’ preference for US Dollar positions as the Greenback has been rebounding from a down week.
In a very light data week—one in which underperformance in a usually dismissed second- or third-tier data point might noticeably impact the market mood—a constant question this week will be whether investors reaching for safety might prefer to shelter in gold of the Dollar. While both have qualities as traditional safe-haven, they will almost certainly continue moving inverse to one another this week.
For now, let’s take a look at the rest of the calendar ahead.
US Economic Data to Watch
Tuesday, January 18 at 830am EST // NY Empire State Mfg. Index (Jan)
[consensus est.: +25.0 // prev.: +31.9]
Between a pull-back in retail sales growth, a sharp-ish jump in weekly unemployment numbers, and other more anecdotal inputs, investors and analysts are still wary that the Omicron-led surge in Covid infections that began late 2021—while less virulent and deadly than previous “waves”—may have slowed down the US economic recovery meaningfully. One of the spots trackers will look out for signs of improvement or deterioration will be in key regional surveys of manufacturing activity, like the Empire State Index. For the January read, expectations are set for a moderate decline from the previous month, but a number that stull represents solid growth overall. A print well below expectations would likely to push a risk-off tone through the markets during this light data week (a strong might have the opposite, although that seems a higher bar to clear.)
Thursday, January 20 at 830am EST // Philadelphia Fed Mfg. Index (Jan)
[consensus est.: 19.8 // prev.: 15.4]
There isn’t much to say about the Philly Fed number that we didn’t cover in discussing the Empire State Survey, just above (Which is a shame, on such a slow data week.) A key difference this month, however, is that analysts are looking for a rebound in the Philly number after December’s print came in well below expectations. Here again, a disappointing headline number on Thursday morning probably sees markets get more risk-averse and reaching for safe haven positions in a choice between gold or the US Dollar.
Thursday, January 20 at 830am EST // Initial Jobless Claims
[consensus est.: +220K // prev.: +230K]
The weekly report on new unemployment claims jumped last week, where expectations were for a slight decline. This kind of shiver seems to fit easily into the category of “it’s nothing to worry about until it becomes something to worry about,” but last week’s uptick will probably have more market attention—and more reactive investors—eyeing jobless claims in a week of slow news and numbers.
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.