GoldPrice.

Happy Monday, traders. Welcome to our regular preview of the trading week ahead. Here you’ll find we focus on the economic data, headlines, and market news flow that look the most likely to have an impact on gold prices, as well as the charts for silver, the Dollar, and other key correlated assets.

Gold prices are enduring tremendous pressure and selling this morning, and major markets around the world are being pummeled by collection of worries and near-term uncertainty. At the time of writing, just after the start of US stock market trading, gold prices have fallen below $1920/oz in the spot market while silver has broken below $26.

As the global markets attempt to get a calm grip around reports of trillions of dollars in dirty money that may pervade the world’s biggest banks, worsening Covid-19 assessments in Europe, and cementing gridlock in a US Congress that badly needs to pass new fiscal stimulus, investors are hastily exiting anything of value in a grab for cash and US Treasuries. The key US equity benchmarks are down more than 1.5% to start the week, following the lead of Asian and European exchanges.

With a very light economic calendar this week, these stories are likely to be the dominating market driver in the days ahead.

US Economic Data to Watch

Wednesday, September 23 at 9am EDT // Markit Manufacturing & Services PMI (Sep)

[(mfg.) consensus exp.: 53.3 // prev.: 53.1]

[(svc.) consensus exp.: 54.5 // prev.: 55.0]

Markit’s PMI assessment of economic activity in the US has been climbing steadily higher from collapse due to the spring lockdowns and analysts are looking for the data set this week to show a second-consecutive (in the case of the manufacturing data, a third) print above 50.0, which represents the breakeven between expansion/contraction. Related data and anecdotal observation seem to support the consensus estimated, although improvement in the all-important services sector continues to lag behind the whole and a potential pullback towards 50—during a light data week—could spook some investors into a risk-off stance. That said, given the way things are going on Monday morning it’s hard to say if “risk-off” will benefit gold prices or just accelerate the scramble for US Dollar cash.

Thursday, September 24 at 8:30am EDT // Initial Jobless Claims

[consensus exp.: +840k // prev.: +860k]

We’re looking for another drop in new unemployment filings this week, although the median estimate is again for a very moderate pullback so there’s real possibility of disappointment. Given the start to this week’s trading, I don’t think it’s very likely that ever better-than-expected numbers will push risk-appetite back into markets, but a miss to the downside will probably ratchet already-elevated uncertainty even higher. As I said above, though, from the vantage point of Monday morning it’s difficult to predict what that means for gold prices.

Friday, September 25 at 8:30am EDT // Durable Goods Orders (Aug)

[consensus exp.: +1.1% MoM // prev.: +11.4%]

Since the pandemic forced a collapse in economic activity in the spring, Durable Goods Orders have turned in a few consecutive months of objectively strong month-to-month increases during these first and second phases of the US’ attempted recovery. Over the long-term, the monthly rate of change tends to stay between +5% to -5% and analysts are expecting the number to finally revert to the mean in August’s report. Based on what we’ve seen this morning, gold (and financial markets in general) could be in store for a volatile week so it’s difficult to predict how second-tier data will impact risk sentiment four days from now. My best assessment is that the data will lose some focus in being a Friday release, and that there’s little chance that markets will celebrate an upside surprise but we could see investors and managers rotate out of risk and into “safe” assets like the Dollar and gold (especially if it’s still “cheap”) should Durable Goods data sink back below 0%.

FedSpeak this Week

Last week’s FOMC meeting didn’t give us much in the way of surprising information to talk about over the next month, but if nothing else we’ll be interested to hear from key Fed officials about their outlook for the next difficult steps in the US economic recovery as well as an idea of what actions the Fed may take over the next year or so if in fact the majority of members don’t expect rate hikes until 2023.

This week also puts Fed Chairman Jerome Powell in front of some congressional committees so we’ll get some level of direct assessment from the Chair.

Tuesday: Chicago Fed President Charles Evans (non-voter) (10am EDT); Fed Chairman Jerome Powell (before the House Fin. Services committee) (10:30am)

Wednesday: Cleveland Fed President Loretta Mester (FOMC voter) (9am EDT); Chairman Powell (House Covid-19 committee) (10am); Fed Vice Chair Randal Quarles (FOMC voter) (2pm)

Thursday: St. Louis Fed President James Bullard (non-voter) (12pm EDT); Chicago Fed President Evans (1pm)

Friday: New York Fed President John Williams (FOMC voter) (9am EDT)

And that’s how the week lays out in front of us, traders. As always, I wish you all the very best of luck in your markets this week, and I’ll look forwards to seeing everyone back here on Friday for our market wrap.