GoldPrice.

Good morning traders, happy Monday. And Happy New Year! 2019 is finally here. I think 2019 is going to be an exciting and—hopefully—profitable year for precious metals traders; in fact, I plan to touch on that in a little bit more detail in the next week or so. Similar to last week, the next five calendar days (four trading) will be fairly light in action and low in liquidity, as most market participants will drop-off by lunchtime Stateside today and not return in strength until next Monday. The one possible exception being Friday’s jobs report.

Before the week gets started in earnest, we have spot-price for gold retaining its strong footing from the last week but (at time of writing) working to maintain around or above $1280/oz while silver traders spot at $15.40.

Let’s have a look at the calendar, which doesn’t really get going until Thursday. Great news for those of us who need an extra day to shake that Hogmanay hangover.

US Economic Data to Watch

Thursday, January 3 at 10am EST // ISM Manufacturing PMI

[consensus expectation: 58 // previous: 59.3]

In what you’ll notice as a bit of a “theme” for this week, manufacturing PMI is expected to come in relatively flat to the previous mark. There is some expectation for a slight decline from November’s data, attributed to the fact that throughout the recent downshift on a global level, ISM’s manufacturing index has been running a little bit higher than other analysis (see Markit’s version of the data, delivering just below 55 vs. ISM’s 59) and so a minor reversion to the mean in reasonable.

Thursday, January 3 at 8:15am EST // ADP Employment

[consensus exp.: +180k // prev.: +179k]

Again, pretty level here and ADP itself is rarely enough of a high-impact event to pass pressure through to precious metals markets. That said, as I’ve mentioned before while ADP doesn’t demonstrate any direct correlation to same month’s payroll’s report there is a somewhat reliable connection between how accurately analysts’ expectation is for the ADP print and how “correctly” the market is pricing-in the NFP number. 

Thursday, January 3 at 8:30am EST // Initial Jobless Claims

[consensus exp.: 220k // prev.: 216k]

My resolution for 2019—okay, one of my resolutions for 2019—will be to continue banging this drum that has “Time to Pay Attention to Jobless Claims Again” painted on it in Day-Glo orange. I might even add some tambourine to the mix. For this week, analysts are anticipating a slight uptick to kick-off the year ahead of the December jobs report.

Friday, January 4 at 8:30am EST // NonFarm Payrolls + Unemployment Rate

[NFP consensus exp.: +180k // prev.: +155k]

[Unemployment consensus exp.: 3.7% // prev.: 3.7%]

Unemployment rate looks likely to remain flat—hard to see how it could really get much lower, so I suspect even a rise in the number for December would be shrugged-off by markets this week as long as it’s within one standard deviation. As for the headline NFP number, market sentiment is leaning towards a modest increase in hiring. That view is supported by the fact that while weekly jobless claims have been rising of late, the trajectory is still fairly flat. According to the US economics team at Goldman Sachs, that reports of harsh weather in December have been similarly mild is also indicative of a gain in new jobs.

Friday, January 4 at 10:15am EST // FOMC Ch. Powell speaks

Friday morning, Chairman Powell will take part in a “joint interview” with former FOMC Chairs Janet Yellen and Ben Bernanke in Atlanta. I’m throwing this one out there as an engagement that could be a non-event or could be a like striking a match next to spilled gunpowder—probably it’ll be somewhere in between. Given the recent tension between the president and Powell, I’ll be watching to see if Powell breaks his usual embargo on commenting about political pressure or if President Twitter-Fingers decides to inject his own thoughts on the interview.

With markets otherwise quiet this week, our one over-hanging macro story remains the continued “partial” shutdown of the federal government. I’m not optimistic that much its going to get done over these next five days, but I expect the landscape to shift somewhat as the new congress gets sworn in at the end of this week.

This week I’ll be working on a brief look at what traders anticipate will be the larger macro stories of 2019 and how they could impact precious metals markets, so keep an eye out for that as well as our weekly wrap-up on Friday.

Until then, I want to wish you all a Happy New Year and a profitable 2019.