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 market prices for silver, the US Dollar, and other key correlated assets.
Gold prices are starting the week slightly below the mark of Friday’s closing bids, but still relatively flat since global trading reopened Sunday evening. As US equity markets are opening for trading, investors’ attitudes seem mixed but generally more optimistic relative to the rough temperament of last week.
With the Fed in quiet mode this week and another stop-gap funding bill passed through Congress ahead of the year-end, it seems less likely that we’ll get the kind of acute, aggressive market moves that were so punishing for gold’s spot prices last week as the US Dollar surged. Still, traders will have to assume that the yellow metal’s trendlines will be beholden to momentum shifts in the Dollar Index—at least to start the week.
For now, let’s take a look at the rest of the calendar ahead.
US Economic Data to Watch
Thursday, December 9 at 830am EST // Initial Jobless Claims
[consensus est.: +225K // prev.: +222K]
Last Friday’s surprisingly weak Non-Farm Payrolls number had been preceded by a strong month of weekly unemployment data which surely contributed, at least to some degree, to the consensus estimate that November’s labor market would continue the pace that was set in October. (And, to be fair, there’s a decent case to be made that the November unemployment rate followed through on the stronger high-frequency data.) Because it’s likely that the market will still be parsing last week’s NFP, there’s not much reason to expect a lot of investor sensitivity to Thursday’s Jobless Claims read.
Friday, December 10 at 830am EST // Consumer Price Index (Nov)
[(core CPI) consensus est.: +4.9% YoY // prev.: +4.6%]
[(headline CPI) consensus est.: +6.7% YoY // prev.: +6.2%]
Year-over-year consumer price inflation in the US economy for the month of November is expected to tick higher even after last month’s numbers came in above expectations; Importantly, though, the data is expected to show that prices rose noticeably slower in the month of November than they did in the month prior. Because last month’s CPI data set was an (unpleasant) upside surprise, it can be expected that investors and traders will be less sensitive to higher expected prints (lessening the chance that gold prices surge higher again as an inflation hedge.) In the other direction, it’s very possible that, particularly if the month-over-month pace is slower than expected, US equity traders may breathe a sigh of relief that pushes stock prices higher and weighs on gold. Truly, though, the path of gold prices in the wake of Friday’s inflation data (and probably for the week as a whole) will be dependent on how the US Dollar moves. As ever: Dollar-up will imply gold-down.
FedSpeak this Week
Last week brought plenty of new headlines and data—Powell’s hawkish side-steps, the big NFP miss—about which we’d love to see further commentary from FOMC officials. Unfortunately, there won’t be any FedSpeak on the calendar this week, as officials enter the mandatory quiet period ahead of next week’s final FOMC of 2021.
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.
