GoldPrice.

Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last five trading days with a focus on the market news, economic data and headlines that had the most impact on gold prices—and may continue to into the future—as well as the charts for silver, the US Dollar and other key correlated assets.

Gold prices are trading well above the levels set on Sunday evening or Monday morning, and wrapping up a week that—while very calm, relative to the last month—sees the yellow metal possibility consolidating strength further up the ladder as recent headwinds wane.

So, what kind of week has it been?

It has been an unusually slow trading week, especially compared to a lot of the market action we experienced in the first quarter of this year, and gold prices were not spared the doldrums. I’d been keeping an eye out all week for something that might catalyze precious metals or commodities markets in general, but there’s been no such luck as of lunchtime on Friday.

• After initially falling from last week’s (artificially high) closing levels around $1735/oz, spot gold prices leveled out through the first US trading session of the week. Monday was an observed bank holiday for most of the world’s developed markets outside of the US, so the overnight run between Monday and Tuesday saw some choppy trading as Asian and European desks got back to full participation.
• Once investors found their direction, it was a broadly positive one for gold, with the yellow metal topping out around $1745/oz on Tuesday before going on later in the week to a 5-week high above $1755/oz.
  
  • Silver also saw consistent support through the week, but would run fairly flat within a band of less than $0.50, due at least in part to silver having much less sensitivity to other assets compared to gold. As of Friday afternoon, silver spot prices look solid around $25.25/oz.

The reliable (inverse) relationship between spot gold prices and benchmark yields on the US Treasury’s 10-year note persisted this week, although the Treasuries market was as uneventful as all our closely-watched assets classes.

• Still, the bigger shifts for gold prices this week were paired with the biggest adjustments in bond yields: Gold’s move higher on Tuesday correlated well with the 10-year yield slipping well below 1.7% again; And the yellow metal’s high-point of the week was achieved after yields corrected lower from an overnight surge.

• Buyers seem much more confident in the sovereign bond markets this week. Once the benchmark yield slipped below 1.7%, sellers were unable to generate anything like the pressure exerted in recent weeks. If this continues to the be case, it may be another tailwind for gold prices to continue rising. The yellow metal looks like it’s consolidated another reliable level of support at $1730/oz this week.

 As unenthusiastic as gold and Treasury markets were this week, equities trading seemed nonexistent. Starting on Tuesday, once most developed economies returned from the Easter holiday weekend, measurements of trading volume in US stocks markets registered at the lowest levels of 2021 for three consecutive days. At the time of writing (on Friday afternoon,) it’s possible we may be close to a fourth.

There certainly was little in the way of market-movers coming from this week’s news flow or macroeconomic data:

• Monday’s report from the ISM on America’s services sector of the economy drove as much attention and trading as anything else. The PMI headline number came in at an all-time high of 63.7 (vs. expectations for a read around 59.0) signaling that the strength that the US manufacturing has managed to maintain since Autumn 2020 may be surging into the services sector thanks to the aggressive fiscal stimulus enacted and planned by the Biden White House.
  
  • This is particularly important for any optimistic outlook for the US this year, as the services sector makes up as much as 90% of the current US economy, by some tallies.
  • The positive PMI release was primarily credited with gains made in US equities on Monday, before investors calmed of the week.
• Later in the week, investors turned some attention to the Fed and the release of discussion minutes for March’s FOMC meeting; Anyone looking for a market catalyst was disappointed here, as well. The committee’s notes indicated clear consensus among FOMC participants about holding the line on very loose monetary policy for as long as it takes to realize the Fed’s updated goals of 2% inflation (on average) and full employment consistently.
  
  • This reinforces what has been the party line from Jerome Powell & Co: Lower interest rates (alongside other dovish monetary policies) are still in the plans for the next 12-18 months at least.
• Powell reiterated these points himself in public comments on Thursday. The Chairman acknowledged the upticks in recent inflation indicators (which Powell maintains are transitory effects of the US economy climbing out of the pandemic,) but pointed to the work still to be done in recovering the labor market.
  
  • The Fed Chair’s nod to labor market uncertainty was also underlined on Thursday by another disappointing increase in the number of Initial Jobless Claims.

Next Week, the focus on inflation and economic recovery remains the top priority for investors and market watchers. We’ll get an updated read on consumer price inflation on Tuesday, with important Retail Sales data coming on Thursday. Who knows? Maybe we’ll even see markets move again.

For now, traders, I hope you can get out and safely enjoy your weekend for the next couple of days. After that, I’ll see everyone back here on Monday for our preview of the week ahead.