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.

Gold prices are starting the week on the front foot alongside US equity markets, with the yellow metal steadily climbing towards $1800/oz as Treasury Yields pull back a bit.

The movement we’re seeing this morning could be a progression of the more optimistic market mood that seemed to bubble-up at the end of last week; Or it could be more indicative of western markets re-setting positions ahead of Tuesday’s US consumer inflation data. How Tuesday’s reporting looks will likely set the tone for the rest of the week that follows, given that the FOMC has entered the pre-FOMC meeting “quiet period.”

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

US Economic Data to Watch

Tuesday, September 14 at 830am EDT // CPI Inflation Rate (Aug)

[(core CPI) consensus est.: +4.2% YoY // prev.: +4.3%]

[(headline) consensus est.: +5.3% YoY // prev.: +5.4%]

Whether due to continuing supply chain and global logistics bottlenecks, or more fundamental macro inputs like lowest-end wage growth and the Fed’s aggressive monetary stimulus, economists are expecting the year-over-year rate of consumer price inflation to remain elevated in the data for August. If the top-line numbers (“core” CPI and the headline inflation read) come in as expected, there are reasons to believe that won’t have the worrying impact on market risk appetite that we’ve seen earlier this year. Namely, the “novelty” of such high numbers has probably worn off and Chairman Powell’s remarks at Jackson Hole last month made it clear that inflation at its current levels won’t spur the Fed to tighten policy without more progress in the labor market recovery.

It’s possible that, similar to July’s CPI, we could see some of the more granular reporting grab the markets’ attention. If the components that have played such an out-sized role in driving overall inflation higher—used cards and airfares, to name the big two—continue to soften, economists and analysts might see the end of a transitory pop in inflation approaching as the Fed has expected. This shouldn’t drive a sharp move in markets (unless it somehow results in a steep drop in headline inflation,) but it would encourage overall market risk-appetite which as of late has led to a moderate tailwind for gold prices while primarily lifting the stock markets.

Thursday, September 16 at 830am EDT // Retail Sales (Aug)

[consensus est.: -0.8% MoM // prev.: -1.1% MoM]

The consensus expectation here is for retail spending to continue to feel the pinch of some of the most liquid fiscal stimulus boosters (like enhanced unemployment benefits in many states) rolling-off, and maybe some degree of slowdown in reaction to the delta variant surge in August. That shouldn’t be too worrying for most economists—and hopefully it wouldn’t be projected as worrying to the average investor. Anything healthier than a slowing of July’s drop in Retail Sales will probably be considered a bonus, boosting investors’ mood and encouraging 2021’s reflation trades.

Thursday, September 16 at 830am EDT // Initial Jobless Claims

[consensus est.: +320K // prev.: +310K]

The rebound in risk appetite that this morning is lifting US equities and gold prices higher after a dour week for both, showed its first signs of life last Thursday thanks in part to Initial Jobless Claims falling to an 18-month low. Likely as not, this week’s data will present a mild correction higher and the print will be overshadowed by Retail Sales dropping at the same time; But, as last week showed, with the Fed putting so much emphasis on the labor market the trend of this high-frequency data point will continue to tug on market sentiment. 

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.