GoldPrice.

Good morning traders, and welcome back to another week in the metals and currency markets!

You can expect a fairly quiet start to the week, as all eyes will be on the FOMC meeting on Wednesday which will include the quarterly update to the Staff Economic Projections. For now, gold prices are a few dollars below their closing level from last week in what looks like a reasonable Monday morning continuation of Friday’s pull-back.

Following the subdued Asian and European sessions, we saw the yellow metal getting a noticeable boost and breaking the line at $1340/oz once again as a result of the NY Empire State Manufacturing Index report for June, which has just posted its largest decline ever, and the first negative print in well over a year. If I’m honest, and I think the price pull-back below $1340 or lower is proving this out, I don’t think that one number is enough to really rock any traders or FOMC participants and it could be forgotten about by the day’s end. We always have to be aware of the possibility of snowballing though, so we’ll also have an eye on the Philly Fed’s survey of the US manufacturing sector on Thursday.

For now, let’s take a look at the rest of the week ahead.

US Economic Data to Watch

Tuesday, June 18 at 8:30am EDT // Housing Starts (May)

[consensus exp.: -0.4% MoM// prev.: +5.7%]

Because the April number was markedly stronger than expected after a few months of subdued starts, a slight retraction month-to-month can be reasonably expected this time around without sending any negative shockwaves into markets.

Wednesday, June 19 at 2pm EDT // FOMC Rate Decision & Updated Economic Projections

[no change to monetary policy expected]

While there’s no reasonable anticipation for the Fed to move off of their current paused position, this will be one of the most closely-watched meeting of 2019 on the back of growing market fear over the last two weeks and increased calls—valid or otherwise—for the FOMC to consider cutting interest rates. The quarterly update to the Staff Economic Projects, which will include the FOMC members’ own projections of the path of monetary policy, will further add to the market’s fascination with the week’s Fed meeting. We’ll have a more detailed preview for you Wednesday morning ahead of the statement and press conference, and of course a helpful recap once the event has wrapped-up.

Thursday, June 20 at 8:30am EDT // Initial Jobless Claims

[consensus exp.: +220k // prev.: +222k]

It’s getting very tempting to just write “Yawn” and move on when it comes to this weekly data point, but I feel like my editors would frown on that. The truth remains, this has become a very flat number lately. Even so, I’ll likely always feel that this is an important number to watch for anyone trading assets closely-tied to the health of the US economy, to be aware of the trendline if not the weekly release. In this current environment, as gloomy news accumulates in other sectors of the American economy, I think a sudden and sharp uptick in jobless claims would really alarm some market participants and force more risk-off positioning—a move for which gold traders would do well to get in on the ground floor.

Thursday, June 20 at 8:30am EDT // Philadelphia Fed Manufacturing Index (Jun)

[consensus exp.: +12.0 // prev.: +16.6]

I alluded to it in the opener: Sunday night I was sort of on the fence about including this in the weekly list, but this morning’s crash in the Empire State Manufacturing assessment makes the Philly Fed’s look a bit more pertinent. One reading suddenly going into the red on the manufacturing sector, which seemed to be holding steady of late, can be considered an outlier; a second ugly surprise could really spook markets though, depending on that state things are in following the FOMC on Wednesday.

Friday, June 21 at 10am EDT // Existing Home Sales (May)

[consensus exp.: +2.1% MoM // prev.: -0.4%]

Sort of opposite of the Housing Starts number that will begin the week, a slight retraction in the prior month makes a bounce in the May number par for the course. The matching rebound that has been measuring in regional housing data confirms this expectation.

Global Economic Data to Watch

Wednesday, June 19 at 11pm EDT // Bank of Japan Rate Decision

[no change to monetary policy expected]

Thursday, June 20 at 7:30am EDT // Bank of England Rate Decision

[no change to monetary policy expected]

With three of the four major central banks in action this week but none expected to announce changes to monetary policy, the markets will be examining the comments of the other two (BoJ and the Bank of England) through the lens of what the Fed has to say (or not say) on Wednesday. I’m expecting all three banks to offer some version of the same message: ready and able to act (i.e., cut rates) if needed, but it’s not needed just yet.

For the BoJ particularly, we’ll also be interested to see their assessment on the US-China trade tensions that continue to heat up. When it’s the Bank of England’s turn on Thursday we’ll of course be listening to hear the committee’s updated outlook for Brexit’s effect on the British economy now that things are further delayed by a Tory leadership election to pick a new Prime Minister.

And that, traders, is how the week lays out ahead of us. I wish you the very best of luck out there, and I’ll look forward to seeing you back here on Friday for a recap of the week’s market action.