GoldPrice.

Good morning gold traders, and welcome to another week in the metals markets.

Following an energetic week of trading just behind us, gold price has had a mild beginning to the week ahead and at time of writing remains within easy touching distance of Sunday’s opening price.

FedSpeak this Week

It’s another week with a relatively mild data calendar but plenty of public engagements for FOMC members, voter and non-voter. As is typically the case following an UNCH meeting, there’s not a high probability of market-moving comments from any of these events, but it’s still good practice as a trader to be aware of them. Disappointingly, the FedSpeak tap closes up following the release of the most recent meeting minutes on Wednesday afternoon, so any discussion points about which the market wants more clarity will have to wait until next week at least.

• Monday, May 20 at 1pm EDT, Fed Vice Chair Richard Clarida (voter)
• Monday, May 20 at 7pm EDT, FOMC Chairman Jerome Powell
• Tuesday, May 21 at 10:45am EDT, Chicago Fed President Charles Evans (voter)
• Tuesday, May 21 at 12pm EDT, Boston Fed President Eric Rosengren (voter)
• Wednesday, May 22 at 1am EDT, St. Louis Fed President James Bullard (voter)
• Wednesday, May 22 at 10am EDT, New York Fed President John Williams (voter)
• Wednesday, May 22 at 10am EDT, Atlanta Fed President Raphael Bostic (non-voter)

US Economic Data to Watch

Tuesday, May 21 at 10am EDT // Existing Home Sales (Apr)

[consensus expectation: +2.7% MoM // previous: -4.9%]

A solid rebound to recover from a nearly 5% decline in March data is to be reasonably expected, and it’s also likely we see a drop as deep as last month’s revised upward. There are some considerably higher estimated out there (Goldman Sachs, for one, is anticipating +4% this month,) so I’m inclined to expect a better-than-expected print. Because key housing market data acts as a reliable forward-indicator of US economic health, a positive improvement like that would be expected to weigh on gold prices while lending some strength to USD.

Wednesday, May 22 at 2pm EDT // FOMC Meeting Minutes

Sometimes after Fed meetings that do not result in a meaningful change to monetary policy or forward guidance our interest in examining the meeting minutes lies in interpreting the path ahead; this time around I think it will be more interesting to parse the committee’s discussions that lead to Chairman Powell’s more upbeat statement, particularly with regards to the “transitory” nature of recent blocks to inflation. Was the committee generally of the same mind? Or were there members who would have preferred to ring the warning bells? If it seems like Powell will have a fight on his hands in coming months to maintain the pause on rate hikes, we can expect to see a reaction in the gold markets. (Trending towards a hike being likely to weaken gold, trending towards a sudden rate cut likely to spur gold strength.)

Thursday, May 23 at 8:30am EDT // Initial Jobless Claims

[consensus exp.: +215k // prev.: +212k]

As evidenced by an anticipated change that’s basically a rounding error, the market expects Jobless Claims to remain hewn to the 210k range, likely for the foreseeable future. We can probably put this one on the back-burner for a bit.

Thursday, May 23 at 10am EDT // New Home Sales (Apr)

[consensus exp.: -3.2% MoM // prev.: +4.5%]

The previous month’s data was the outperformer of March’s housing reporting by a noticeable margin; this, coupled with recent declines in building permits expected to pass-through to New Homes positions the market expectations towards a month-over-month decline. Because it seems pretty well telegraphed, I wouldn’t expect gold prices to get much of a risk-off boost unless the New Homes Sales number is deeply lower than anticipated.

Friday, May 24 at 8:30am EDT // Durable Goods Orders (Apr)

[consensus exp.: -2% MoM // prev.: +2.7%]

Because aircraft orders represent such a heavily-weighted part of the Transportation component of Durable Goods Orders, Boeings on going PR nightmare and loss of orders is expected to drag the overall number lower on a month-to-month basis. I do think there’s some potential, should the ex-transportation data be particularly strong and lead to a headline print closer to flat, for gold to be vulnerable around this release.

Global Economic Data to Watch

Outside of the US this week, it will be less about hard macroeconomic data having an immediate impact on our markets and more about narrative developments that will shape broader economic themes in the near- to medium-term. Prime Minister—but maybe not for much longer—Theresa May will somehow get one more chance to ram her Brexit plan through parliament. The presumed failure to do so should by this point be so normal that markets outside of London won’t react much but the knock-on effects (new elections, for one possibility) should give us some clarity on where the next flash-point for risk markets lies in this unending Brexit saga.

And on Sunday, we’ll have European Parliamentary elections. Like UK parliamentary procedure this week, gold traders should mostly be able to sleep through MEP elections but we’ll be keen to see how the final results shake out and what they mean for the future of Euroscepticism and major bodies like the European Central Bank (who will be electing a new President later this year.)

Wednesday, May 22 at 4:30am EDT // UK Inflation (Apr)

[consensus exp.: +2.2% YoY // prev.: +1.9%]

We’ll be monitoring the UK inflation report this month mostly in case we see a train wreck. In sort of a mirror image of the Fed and US Inflation, transitory factors in the UK are expected to push annualized inflation noticeably above the 2%. A headline inflation print below that mark this month would indicated that the protracted Brexit talks and uncertainty is weighing much heavier on the British economy than we think. The damage to GBP that would result (after it already fell 2% last week) could be expected to weigh on gold prices as well.

And that’s your week ahead, traders. I wish you the best of luck out there, and I’ll look forward to seeing you back here on Friday for a recap of the week’s events.