GoldPrice.

Good morning, gold traders. Welcome back to another week in the metals and currency markets.

Gold price has started out on the back foot this week, after dropping below the line of support at $1290/oz shortly after the Sunday evening open. After briefly challenging $1282 earlier today, and with some tailwinds from a gloomy outlook reported in the NY Empire State Manufacturing Index for April, the spot price for yellow metal is on the up once again and may make a run at crossing back above $1290.

US Economic Data to Watch

Tuesday, April 16 at 9:15am EDT // Industrial Production (Mar)

[consensus expectation: +0.2% MoM // previous: flat]

March weakness in automobile manufacturing in the U.S. is expected to keep the Industrial Production number muted and close to flat for March, and pass-through to a small month-over-month decline in overall capacity utilization for the US manufacturing sector. Expect a lower (maybe even negative) print to induce some US Dollar weakness and possible tailwinds for gold price, while an upside surprise would be some welcome news for American manufacturing and, if big enough, would bring the opposite price action for Dollar/gold.

Tuesday, April 16 at 10am EDT // NAHB Housing Market Index (Apr)

[consensus exp.: 63 // prev.: 62]

NAHB’s Index has held steady for the last couple of months after a sharp drop to hi-50s/lo-60s to end 2018. A third-consecutive report at 62 seems unlikely, so given that housing data has, at best, been only mildly positive in the first quarter of 2019 analysts will be hoping for some signs of life from an uptick in the number.

As with virtually all US housing data, given its historical position as a leading indicator for the economy as a whole, positive data tends to encourage a selling impulse in gold markets while disappointing prints have the opposite effect.

Wednesday, April 17 at 8:30am EDT // Balance of Trade (Feb)

[consensus exp.: -$53.5B // prev.: -$51.1B]

I’ve only recently begun tracking this monthly data set, in an attempt to get a sense for white kind of pressure might be applied to the ongoing US-China trade negotiations; the idea being that, as the White House has repeatedly used the trade deficit as a rhetorical weapon, increases in the deficit might give US negotiators a shorter clock to work with. Last month saw the deficit shrink a good deal more than expected, so Dollar traders will be interested to see if there’s a slight re-inflation of the number this time around. As we’ve said before, there are so many opposing market forces with stakes in the resolution of the US-China trade dispute that it’s difficult to say with confidence which possible outcomes would be bullish for gold and which would be bearish. For now, it’s primarily useful to know when that nebulous outcome might be reached and be prepared to capitalize on the shifts that might come to the gold market.

Thursday, April 18 at 8:30am EDT // Retail Sales (Mar)

[consensus exp.: +1.0% MoM // prev.: -0.2%]

February’s Retail sales numbers were dud following a January rebound, and it’s been difficult to pattern-out a trend line for this important data set as the majority of the last 12 months has brought persistent fluctuation on either side of the 0.0% line.

As other components of the US economy show signs of slowing, the function of Retail Sales reports for the gold trader is pretty simple: a 1% uptick in sales as expected, or better, would be expected to apply downward pressure to gold prices against a boosted US Dollar; a near-zero or second-consecutive negative print would suppress the Greenback and possibly lift gold prices in some risk-off positioning from US traders.

Thursday, April 18 at 8:30am EDT // Philadelphia Fed Manufacturing Index (Apr)

[consensus exp.: 10.8 // [prev.: 13.7]

The Philly Fed Index has been another source of data volatility in recent months, with an 18pt disappointment in February followed by March’s 9pt beat (a 17pt improvement.) Even with a couple of those month-over-month increases recently, the overall 12-month trendline is in decline. A drop from last month, which is expected, should be a gold-positive/Dollar-negative influence, if anything.

Thursday, April 18 at 8:30am EDT // Initial Jobless Claims

[consensus exp.: 205k // prev.: 196k]

Are we going to have another historically low Jobless Claims number this week? Statistically speaking, probably not. But unless it comes with a 250-handle don’t expect this data point to be anything but a headwind for gold prices.

Friday, April 19 at 8:30am EDT // Housing Starts (Mar)

[consensus exp.: +6.0% MoM // prev.: -8.7%]

US Housing Starts are expected to rebound again in March primarily driven, says Goldman Sachs’ US economic team, by “lower mortgage rates and stronger construction job growth.” Arriving on a Friday morning before the Easter holiday means the actual print will probably be low-impact for metals and currency markets, but still useful in building an overall model for the US Dollar economy moving forward.

Global Economic Data to Watch

Thursday, April 18 // Euro Area PMIs (Apr)

This will be a pretty quiet week for Europe, especially with their Easter holiday starting on Friday and extending through Monday’s session. The one pack of data worth keeping an eye on will be Thursday’s Markit PMI reporting (manufacturing, services, and composite) for the core European economies in Germany and France, as well as the aggregate for the Euro Zone as a whole. Analysts broadly expect improvement in the most important Manufacturing sectors, but some downside in the services PMI components. The gold market impact of this report, if there is any, will likely be some increased buying of the Euro which would boost gold to some degree against the Dollar.

In Brexit news: there shouldn’t be any. The UK parliament is on holiday until April 23, at which point the catastrophe engine will fire up once again.

And that’s your week ahead, traders. I wish you the best of luck out there in the markets, and I’ll see you back here on Friday for a wrap-up of the week that was.