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 other key correlated assets.

After recovering from a brief break of support during the first hours of European trading overnight, gold prices have recovered early on in US trading and are trading at a slight premium to last week’s closing price, on Monday morning.

Gold’s rebound this morning has certainly been boosted by a surprisingly poor read on a key regional manufacturing data set, indicating how investors might be more-and-more on edge about the risk of a recession brought about by Fed rate hikes, and how that shift in investor mood might benefit recently “cheap” gold prices even as the US Dollar continues to run very hot.

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

US Economic Data to Watch

Tuesday, May 17 at 830am EDT // Retail Sales (Apr)

[consensus est.: +1.0% MoM // prev.: +0.7%]

All of the recent chatter in financial media and punditry about a looming recession (founded, or otherwise) will drive the focus of investors and analysts back towards these data points that describe the US consumer’s willingness to continue pumping money in to the US economy even as the Fed pulls away “the punch bowl.” Weaker than expected retail growth, even more so a contraction in Retail Sales, is the kind of data set that would traditionally be a tailwind for gold either as an investor reaction to uncertainty  in the medium- to long-term, or as investors recalibrate expectations for how aggressively the Fed may hike rates through the year. If we were to see the former, however, we are in an environment where the US Dollar might soak up all of the desire for risk asset, leaving gold to flounder; if we were to see the (less likely) latter, gold might get a stronger boost as the withdrawal of higher rate expectations would weigh on the Dollar directly.

Thursday, May 19 at 830am EDT // Philadelphia Fed Mfg. Index (May)

[consensus est.: 16.5 // prev.: 17.6]

Fed Chair Jerome Powell pointed to continued strength in the US labor market as a requisite for the Fed to be able to pull off their “soft landing” approach: slowing down the economy just enough to curb high inflation, but with enough control to avoid tipping into a full-on recession. But a drop off in the productivity and growth of the US manufacturing sector, created by waning demand and ever-persistent supply chain issues, could be a major obstacle for the Fed as well. The most recent nationwide reads on industrial activity were more tepid than investors had hoped, and we’ve already seen on Monday morning that a disappointing regional survey can set investors on edge, boosting gold prices higher along with other safe-haven plays. Active gold traders should keep an eye out for a similar dynamic on Thursday morning.

FedSpeak this Week

Investors, managers, and Fed watchers this week will be examining the scheduled public remarks and Q&A’s of FOMC officials through the lens of last week’s CPI data, which showed consumer inflation declined year-over-year—indicating price inflation may have peaked in the spring—but not as steeply as anticipated. Observers and analysts will be seeking to understand how the new data set fits in to these individual participants’ projections for Fed policy in over the next 18 months and how that might impact the FOMC’s staff economic projections due in June.

Tuesday: St. Louis Fed President James Bullard (FOMC voter) (8am EDT); Minneapolis Fed President Neel Kashkari (non-voter) (1230pm); Fed Chair Jerome Powell (FOMC voter) (2pm); Cleveland Fed President Loretta Mester (FOMC voter) (230pm); Chicago Fed President Charles Evans (non-voter) (645pm)

Wednesday: Philadelphia Fed President Patrick Harker (non-voter) (4pm)

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.