GoldPrice.

Good morning, traders; Welcome to our market week preview, where we take a look at the economic data, market news and headlines likely to have the biggest impact the price of gold this week and beyond, as well as market prices for silver, the US Dollar, and other key correlated assets.

It’s going to be a shockingly brief preview this week, as we’ve come to one of those weeks in the calendar year where there’s precious little data that may be of any real importance to the valuation of assets like gold or the Dollar in a moment like this in which the overall market’s risk appetite has been swing sharply from one side to the other.

Gold prices are higher this morning just after the open of cash trading in US stock markets. After redrawing support at the $1900 level during the Asian trading hours, the yellow metal has pushed higher to mild peak earlier this morning before dropping back to $1910/oz; Silver spot prices have followed a similar pattern and now trade near $24.60 having briefly looked like a challenge to resistance at $25/oz.

US equities are higher this morning, driven by the seemingly endless resuscitation of “hope” for passage of a fiscal stimulus bill before the November US elections. Taken together, the tremendous odds against anything meaningful getting done—a view now rooted in our direct experience—and the gains that risk assets have nonetheless made every time Washington’s current hog traders revive talks underline just how desperate development markets are to stabilize the outlook for the US economy. Get ready, then, for another week in which a great deal of market trends and sentiment will be dictated by this story (at least in terms of what we can anticipate.) The US House of Representatives has set a firm-ish deadline for Tuesday to agree on a deal, so that say’s session could see the next turn in the story.

Whether or not Friday’s market wrap will be as brief as today’s piece will be determined by the newsflow around stimulus talks, and any sudden shifts as we close in in the US federal elections.

US Economic Data to Watch

Thursday, October 22 at 830am EDT // Initial Jobless Claims

[consensus exp.: +860k // prev.: +898k]

Last week’s unexpected and sizeable jump in the number of new unemployment applications caught investors and analysts off guard and drew one more dark circle around the US labor market’s stuttering post-lockdown recovery. It seems to me that any pull back from last week’s number will be looked at as a reassuring correction, while big money positions might get considerably more nervous about stability if the weekly number remains that close to 900,000. Those possibilities would presumably be bearish and supportive for immediate gold prices, respectively; but the market’s reaction to stimulus talks earlier in the week may well muddy those waters.

FedSpeak this Week

With Washington appearing to try once more to revive talks (and expectations) for a desperately needed fiscal stimulus lifeline for both American business and consumers, the dire necessity for such assistance will be regularly underlined throughout the week’s docket of public appearances by Fed officials. Depending on the timing of talks in DC, we may also get some relevant FOMC commentary on the impact of these eleventh-hour talks succeeding (or not.) All of this, I think, will propel an undercurrent of uncertainty and risk-aversion through markets that, given the Dollar seeming to over-extend last week, will be broadly supportive of gold above $1900 baring anything short of a guaranteed rescue deal.

Monday: Federal Reserve Vice Chair Richard Clarida (FOMC voter) (1145am EDT); Minneapolis Fed President Neel Kashkari (FOMC voter) (12pm); Philadelphia Fed Present Patrick Harker (non-voter) (3pm)

Tuesday: Chicago Fed President Charles Evans (non-voter) (1pm EDT)

Wednesday: Cleveland Fed President Loretta Mester (FOMC voter) (10am EDT)

And that’s how the week lays out ahead of us, traders. As always, I wish you all the very best of luck in your markets in the coming days, and I’ll look forward to seeing you all back here on Friday for our market-week wrap up.