Good morning, gold traders. Welcome back for another (shortened) week in the gold markets. Following the long holiday weekend in the US we have a brief four days of market trading ahead of us, and those days look to make up one of the lightest economic calendars we’ve seen in 2019.
As we said last week, with this level of calm on the data calendar traders will want to remain tied into the news flow surrounding the US-China trade conflict. When trying to spot potential gold market movers, that will continue to be the $600bn elephant in the room.
At time of writing this morning, early US trading is drawing the air out of gold’s balloon. Because Thursday’s breakout in gold price has failed to produce an honest rally towards $1300/oz again, I suspect US traders this morning are happy to take some profits on the initial move as the dollar is also regaining strength to begin the week; the sale of those gold positions into more risk-on assets sees gold trading roughly $5 lower, at $1280/oz.
As we turn to look at the week ahead, I’d say not only is it a sparse calendar, but the data points we will get updated on this week typically don’t have heavy impact on gold markets. Do keep in mind though, any major shocks vs. anticipated results can still move your charts.
Let’s dive in.
US Economic Data to Watch
Tuesday, May 28 at 9am EDT // Case-Shiller Home Price Index (Mar)
[consensus expectation: +0.3% MoM // prev.: +0.2%]
Last week’s housing data was surprisingly poor. I don’t see much likelihood of this week’s Case-Shiller numbers repairing that perception; partly because it’s anticipated to be such a flat number, and also because it’s data from the month prior.
Thursday, May 30 at 8:30am EDT // Initial Jobless Claims
[consensus exp.: +215k // prev.: +211k]
We’ll maintain our weekly acknowledgment of the Jobless Claims number, if only because the gold and US Dollar markets have always proved they are willing to react to it. That said, I expect it to settle into a pretty dull trend for the summer.
Thursday, May 30 at 12pm EDT // Fed Vice Chair Richard Clarida Speaks
Vice Chair Clarida’s remarks to the Economic Club of New York looks to be the only meaningful public remarks from a Fed official this week. He will deliver a prepared address and field Q&A from those in attendance.
Friday, May 31 at 8:30am EDT // Personal Income & Spending (Apr)
[personal income consensus exp.: +0.3% MoM // prev.: +0.1%]
[personal spending consensus exp.: +0.2% MoM // prev. +0.9%]
Analysts are expecting to see Personal Spending data pull-back from a surprising jump in February to look more like the tepid Personal Income numbers of recent months. If the US Dollar has a rough week as a result of negative US-China trade headlines, and finds itself trading around a vulnerable level Friday morning I could see even the results expected by consensus to further shake confidence in the Greenback which would provide a lift to gold prices.
Friday May 31 at 8:30am EDT // PCE Price Index (Apr)
[consensus exp.: +0.3% MoM // prev.: +0.06%]
Currency markets, including gold, tend to be more sensitive to the Personal Income and Spending data than the Personal Consumption Index, but PCE still deserves a spot on your calendar because a large dislocation higher than expectations(positive US Dollar/negative gold) or lower (vis versa) could still move the charts.
And that’s how your brief week ahead looks, traders. As always, I wish you the best of luck in the gold markets this week. A brief note: I’ll be stepping away for vacation over the next couple weeks, and my colleague Ryan Page will be with you on Friday to recap the week’s events.