GoldPrice.

Good morning, traders; Welcome to our market week preview, where we 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 lower this morning, off from the closing prices before last week’s Good Friday market holiday. This drop is understandable as the rise to 1735 early Friday morning was more the result of very thin market liquidity rather than any reasonable projection of price or value. Sunday evening’s market-open saw gold prices retract as expected, and the downward momentum has seen spot prices fall closer to 1722/oz.

This week we will continue watching the sovereign bond market, as Treasury yields (and the US Dollar that will trade alongside it, generally) are expected to remain the strongest counterweight to any gains in precious metals or stock prices. Looking at the macro data calendar ahead, this key point in these terms will be the release of the Fed’s meeting minutes (from last month’s FOMC) on Wednesday.

Let’s look at what’s ahead.

US Economic Data to Watch

Monday, April 5 at 10am EDT // ISM Non-Manufacturing PMI (Mar)

[consensus est.: 59.0 // prev.: 55.3]

Last week’s PMI read for the manufacturing sector confirmed that industrial activity in the US continues to accelerate since last fall; That pace, assuming it continues, will be vital to the trajectory of the US economy through recovery and into positive growth for 2021 and beyond. Seeing the same kind of improvement in the services sector would arguably be more important, as the 21^st century has seen the US shift firmly into a services economy from one based primarily on manufacturing.  With markets a bit quiet to start the week, services PMI tallying close to 60 as expected would likely big a strong risk-on signal for markets, and it’s possible that gold prices could actually see a boost higher alongside equities in that event, as part of the big “reflation trade.” Of course, it’s also possible that signaling stronger growth sooner may bring the inflation hawks back out, pushing Treasury yields higher and dampening momentum in gold and/or stocks.

Wednesday, April 7 at 2pm EDT // FOMC Discussion Minutes

Last month’s FOMC meeting was important (and will continue to be,) not because of policy decisions made but because of the updated Staff Economic Projections. Those projections estimate exceptional growth for the US economy in 2021 and continued strength and improvement through 2023. But, because they do not predict either labor market improvement/stability or inflation to meet the Fed’s stated objectives before the end of 2023, the SEP shows that the “consensus” estimate among FOMC members is that short term interest rates will remain near 0% until at least 2024. With the release of the discussion notes from the same two-day meeting, investors and analysts will be looking for any hints as to how firm some participants are about holding rates low for that long, or if continued improvement in the US economy through Q2 might lead to a more hawkish set of projections next time the Fed offers them.

Thursday, April 8 at 830am EDT // Initial Jobless Claims

[consensus est.: +680K // prev.: +719K]

After falling quickly below 700,000 in March, last week’s Jobless Claims data rebounded higher. It didn’t seem to have much impact on the market’s risk appetite at the time because: a.) it will remain likely that we see a few jerks higher here and there as the longer-term average of weekly job losses (hopefully) continues to fall, and b.) investors were mostly focused on what they expected to be a very strong monthly Jobs Report the next day. This week’s consensus call is for a drop back below 700K, which I admit I’m not totally convinced by; But I expect that the afterglow of last week’s payrolls number reporting nearly one million jobs added (back) to the US economy will persist, so even a miss again this week probably doesn’t spur a lot of fear or risk-off sentiment.

FedSpeak this Week

Though the key point on this week’s Fed calendar will probably be Wednesday’s release of discussion minutes from the most recent FOMC meeting, there are some scheduled public comments worth being aware off; The most important of which will be those that come after the market has had a chance to parse the meeting notes. Analysts will be viewing Chair Powell’s remarks in particular through that prism on Thursday afternoon:

Wednesday: Chicago Fed President Charles Evans (FOMC voter) (9amEDT); Richmond Fed President Thomas Barkin (FOMC voter) (12pm)

Thursday: St. Louis Fed President James Bullard (non-voter) (11am); Fed Chair Jerome Powell (FOMC voter) (12pm)

Friday:  Dallas Fed President Robert Kaplan (non-voter) (10am)

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.