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 other key correlated assets.
After the week’s trading began a pullback in equities from the rapturous rallies of last Thursday and Friday, gold prices had a much more productive Monday, building on last week’s strong gains and looking to consolidate support near three-month highs.
US Economic Data to Watch
Wednesday, November 16 at 830am EST // Retail Sales (Oct)
[consensus est.: +1.0% // prev.: flat]
Candidly, whether or not this month’s Retail Sales data set comes in above, below, or in-line with expectations isn’t a real point of interest here. We want to see how investors and the market as a mob digest any of the above, in context of the next Fed meeting in December. The positive surprise in last week’s CPI number (that is, lower than expected inflation prints) spurred not only equities but gold and other commodities on to one of the strongest single-day performances in years on the view that it suggests a looser Fed policy in the near- to medium-term. Following the most recent FOMC comments, would a positive result in retail sales numbers—a stronger, or even as-expected, performance—bring about the same reaction? Or would it be interpreted as another green light for the FOMC continue on their aggressive pace of tightening, as it has been for much of 2022?
FedSpeak this Week
If last week’s docket of public appearances by key Fed officials was focused on adding details around the implication by Jerome Powell and the FOMC earlier this month that a slower (by maybe not lower) path for rate hikes might be around the corner, this week will likely focus on trying to reign in the market exuberance that drove such an aggressive rally in gold, as well as risk assets (like nearly the whole of the US stock market) on Thursday and Friday. Markets hadn’t even opened for Sunday evening trading when already saw the tactic in-play:
"The market seems to have gotten way out in front" over one CPI report, Fed Gov. Chris Waller says in Australia.
"We're going to need to see a continued run of this kind of behavior...before we really start to think about taking our foot off the brake."
— Jeanna Smialek (@jeannasmialek) November 13, 2022
The result to start the week was a muted down day for equities; but, as Monday’s trading demonstrated, these pushbacks from the Fed, so far, are not dulling gold’s newly polished shine just yet.
Tuesday: Philadelphia Fed President Patrick Harker (non-voter) (9am EST); Fed Governor Lisa Cook (FOMC voter) (9am); Fed Vice Chair Michael Barr (FOMC voter) (10am)
Wednesday: New York Fed President John Williams (FOMC voter) (950am); Barr (10am); Fed Governor Christopher Waller (FOMC voter) (245pm)
Thursday: St. Louis Fed President James Bullard (FOMC voter) (8am); Cleveland Fed President Loretta Mester (FOMC voter) (945am); Minneapolis Fed President Neel Kashkari (non-voter) (1040am & 145pm)
Friday: Boston Fed President Susan Collins (FOMC voter) (830am)
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.