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 markets are trading relatively flat on Monday morning after spot prices slid mildly in the earliest hours of US trading. The yellow metal appears to still be under some pressure from still-lofty Treasury yields (the 10-year remains well above +4%) but is also holding a steady line.
Markets, in general, seem oddly quiet on Monday, with very light data and (expected) headline slate in the coming days. It seems unlikely that investors will be willing or able to sit on their hands for a whole 10 days in anticipation of the November FOMC meeting next week.
US Economic Data to Watch
Thursday, October 27 at 830am EDT // Initial Jobless Claims
[consensus est.: +220K // prev.: +241K]
As we move towards next week’s FOMC meeting, it seems as if investors are making themselves more comfortable with locking in yet another +0.75% rate hike—despite all the talk of “bond vigilantes” forcing a pivot. The October Jobs Report will come a few days too late to be factored into the FOMC’s next decision and announcements, so Thursday’s Initial Claims data will be some of the last concrete data on the US labor market; as such, especially given an otherwise quiet week, we may see added scrutiny and volatility in the Dollar market (and, therefore, gold) markets around the number.
Friday, October 28 at 830am EDT // PCE Price Index (Sep)
[(core PCE) consensus est.: +5.2% YoY // prev.: +4.91%]
[(headline PCE) consensus est.: +6.3% YoY // prev.: +6.25%]
Ripples and reverberation from the over-heated September CPI read that was released a couple of weeks ago are still being felt in the gold market and certainly in US Dollar trading as well. It’s unlikely, then, that we’ll see similar volatility around the release of the Fed’s “preferred inflation metric” covering the same period since investors already have an idea of what’s coming. Still, there’s always some amount of trading around this release every week, and it will be interesting to see if we do get a repeat of the unusual trading pattern that followed the CPI data set, which drove a strong rally in gold prices despite all fundamental signs pointing the other direction for the yellow metal in the near term.
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.