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.

In a volatile start to the US trading week, gold prices are trading somewhat lower than the bids that opened spot trading on Sunday evening, but well above the morning’s lows.

After a soft slide lower during the Asian and European trading sessions, gold prices initially dropped sharply as US stock markets opened, finding support above $1790/oz. The fully-returned market may be working out price discovery for the yellow metal following its unexpectedly strong rally through last week’s low-liquidity trading. We’ll keep an eye on how the dust settles this morning, but for now it seems broadly positive that, roughly an hour after cash trading began for the week, gold has pared back the initial loses.

On the schedule this week, the first big test of gold’s new purchase above $1800/oz will be in the market reaction to Tuesday’s new inflation data. For now, let’s take a look at the rest of the calendar ahead.

US Economic Data to Watch

Tuesday, July 13 at 830am EDT // CPI Inflation (June)

[(core) consensus est.: +4.0% YoY // prev.: +3.8%]

[(headline) consensus est.: +4.9% YoY // prev.: +5.0%]

Analysts expecting the high inflation reads of the last two months to stick around for a third; This is based largely on the fact that prices big ticket travel spending items like airfare and hotel stays remain high (as a result of the reopening surge,) as do prices for used cars other effects of a global supply chain struggling to rise to post-vaccine surge in demand. Because these are most likely acute inflationary inputs, this still generally fits the Fed interpretation that the current spike in inflation is “transitory.” There will be more pressure on CPI numbers in the coming months to drop, however, as our denominator will change as we will be comparing current performance to the first months of “recovery” in 2020 to get our year-over-year numbers.

For this time around: gold prices reacted strongly to the first major spike in CPI in April, and then much more mildly to similar numbers in May. Expect this trend to continue, and for an as-expected Tuesday number to put some mild pressure on gold prices on the day.

Thursday, July 15 at 830am EDT // Initial Jobless Claims

[consensus est.: +350K // prev.: +373K]

From a “risk to gold” perspective, it seems we’ve settled into a phase where seeing the number of initial jobless claims slide lower week-to-week (a generally positive indicator of the pace of US economic recovery) will be a check-in, non-event for the precious metals markets. While unexpected (for now,) we’ll keep an eye out for large corrections higher (which would likely see gold bid higher) or a sudden acceleration of the downward trend (which, if persistent, would dim the price outlook for gold.)

Friday, July 16 at 830am EDT // Retail Sales (June)

[consensus est.: -0.4% MoM // prev.: -1.3%]

One more month of deflated-to-negative Retail Sales data, as the surge of spending (particularly lower down the income ladder) finishes unwinding from the direct stimulus payments of February and March. Over the next month or so, analysts and some investors may try to use Retail Sales data sets as tea leaves through which to project that consumer inflation is indeed “transitory,” or else more problematic; But unless that analysis picks up more followers in the general public it’s unlikely to push gold and/or Dollar markets dramatically one way or the other. Expect smooth sailing around this Friday data, but keep an eye out for any big upside surprises which would almost certainly encourage the reflation trade in equities and may lift gold prices as well.

FedSpeak this Week

After taking the last week off so Fed-watchers could spend their summer holiday week on the beach instead of parsing keynote addresses, FOMC officials are back on the public circuit this week. The centerpiece will be Chairman Powell’s semi-annual testimony before congress on Wednesday and Thursday. Observers may be especially attentive to Powell’s commentary as it will follow on the heels of Tuesday’s updated consumer inflation numbers and, while no dramatic shifts are expected, we’ll want to see if Powell & Co. feel compelled to make a statement on any new news.

(As a note: expect advance copies of Powell’s opening statements to be released ahead of his actual testimony on Wednesday; Usually one hour prior.)

Monday: New York Fed President John Williams (FOMC voter) (930am EDT)

Wednesday: Fed Chair Jerome Powell (FOMC voter) (12pm EDT)

Thursday: Powell (930am EDT); Chicago Fed President Charles Evans (FOMC voter) (11am)

Friday: Williams (9am 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.