Gold Price Preview: March 7 - March 11
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 strongly elevated from last week’s close, as the yellow metal joins other key players in the global commodities complex rocketing higher on scarcity concerns and reaches for safety resulting from the Russian invasion of Ukraine and a war that didn’t show any signs of cooling over the weekend.
We can expect another week dominated by headlines coming out of Eastern Europe and the capitals of Russia, which may again mute the response of gold (and other assets classes) to any other inputs that typically drive the market. Gold spot prices twice reached the vaunted level of $2000/oz during overnight trading before reeling back considerably after the second failure to hold. Whether this resistance at a major level is a coincidence of timing as the news out of Ukraine constantly shifts, or whether there is more technical resistance to gold rising above $2000 is a dynamic worth keeping an eye on in the sessions to come.
For now, let’s look at the rest of the calendar ahead.
US Economic Data to Watch
Thursday, March 10 at 830am EST // Consumer Price Index (Feb)
[(core CPI) consensus est.: +6.4% YoY // prev.: +6.0%]
[(headline CPI) consensus est.: +7.9% YoY // prev.: +7.5%]
Economists anticipate another monthly CPI report that prints consumer inflation at the highest levels in 40 years, as many of the same upward pressures—supply chain bottle-necking, the feedback loop of inflation expectations—remain in play; additionally, commodities prices were hanging high in February even before the Russian invasion of Ukraine (which will surely keep consumer prices elevated by raising input prices around the world for a time.) The promising note for economic stability will (hopefully) be that core price inflation (ex. food and energy) will have risen at a slower pace month-over-month, but we can still assume that the headline coverage of Thursday’s number will tout the 7%+ annualized number. However much the market is reacting to economic data this week, and headlines that don’t have to do with the war in Eastern Europe, the expected results of February’s CPI report should be generally bullish for gold prices in the immediate-term, pushing more investors towards the yellow metal as an inflation hedge.
Friday, March 11 at 10am EST // Univ. of Michigan Consumer Sentiment (Mar)
[consensus est.: 61.0 // prev.: 62.8]
Without much else on the data docket this week, if there is capacity in US markets for attention on anything other than the war ongoing it might fall on the most current read of how the US consumer’s outlook is being affected by events and Ukraine and its impact on the economy at home and abroad. This will give observers a useful data point in modeling the degree of downside risks that the war poses to many economic projections for the first half of 2022.
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.