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.

Coming out of a long holiday weekend in the US markets, gold prices are slightly weaker this morning. The yellow metal’s chart has lost some momentum after rising higher in the European trading hours; An elevated 10-year yield is providing a bit of a headwind, but some profit-taking trades may also be in the mix.

The question for Tuesday’s session—and through the week leading up to Friday—will be whether or not gold can recover a position above $1900/oz, which is currently sits just below. On Friday, of course, we have the newest monthly Jobs Report, which will give us some important input on projecting the recovery of the labor market and the US economy as a whole through the end of 2021.

US Economic Data to Watch

Tuesday, June 1 at 10am EDT // ISM Manufacturing PMI (May)

[consensus est.: 60.9 // prev.: 60.7]

Supply chain issues which have been a frustrating restrictor as the US economy has re-opened more fully in 2021 appear to be starting to ease in some manufacturing sectors like automotive production. With that hopefully continuing (and spreading,) economists expect the pace of industrial activity to gold steady at historically strong levels. An as-expected report might further energize the re-opening/reflation trade that has benefited gold prices alongside equities this spring; or else it might already be priced into the current market.

Thursday, June 3 at 815am EDT // ADP Employment Report (May)

[consensus est.: +650K // prev.: +742K]

The ADP read on private payroll jobs growth hasn’t given us a lot of useful information (for our purposes here, at least) in several months: See just last month, when a strong ADP number preceded the biggest downside miss in the history of the NFP compared to expectations. Still, the ADP always has the potential to spur some knee-jerk market movements if it surprises to the upside of the downside so it feels necessary to point it out. Both possibilities—a beat that accelerates the happy reflation trade, or a miss which would suggest that the Fed’s dovish policy programs must remain for a while—could be a tailwind for gold prices. Mostly, we should just keep an eye out for brief volatility here.

Thursday, June 3 at 830am EDT // Initial Jobless Claims

[consensus est.: +395K // prev.: +406K]

Seeing the weekly claims number finally dip below 400,000 would be another positive step after last week saw the four-week average pull below 500K. As we see every month though, it’s inevitable that the initial claims report will get overlook in the week of the month Jobs Report.

Thursday, June 3 at 10am EDT // ISM Services PMI (May)

[consensus est.: 63.0 // prev.: 62.7]

US services sector activity is believed to have continued at a strong, expansionary pace over the last month. As with Monday’s manufacturing sector report, this data point could provide a boost to the commodities space (including gold and silver) alongside US equities via the re-opening/reflation trade (Unless the positive data is already priced in.)

Friday, June 4 at 830am EDT // May Jobs Report

[(NFP) consensus est.: +650K // prev.: +266K]

[(unemployment) consensus est.: 5.9% // prev.: 6.1%]

Following the wreck that was last month’s Jobs Report, the market as a whole is looking for a strong rebound in Friday’s NFP number in particular. Economists and analysts, for their part, seem to expect the same, with the accelerating pace of re-opening businesses outstripping any drag from (real or imagined) labor supply issues. With the economy spinning back to speed and participation increasing, the headline unemployment rate is also expected to move below 6%. In this case, it’s tougher to map how several asset classes—like gold or the stock market—will react to an as-expected Jobs Report. While strong performance in many macro data points (like this week’s PMIs) have been additive for these assets because they point to a recovering economy and the growing demand that implies, big steps forward in the labor market recovery would also suggest that the point where the Fed starts to turn off the easy money taps—however far off it might be in absolute terms—is moving closer. Any tip towards a day on the calendar when the Fed’s interest rates are higher than today tends to crimp the stock market (if only briefly) and push some volume of investors out of gold and into cash positions.

FedSpeak this Week

Next week begins the quiet period ahead of the June FOMC meeting, so this week will be the last chance for public remarks from participants. Last week a few key regional presidents reiterated the plan to hold rates at the lows through this pop in inflation, while Vice Chairs Quarles and Clarida both suggested that the time to begin talking about a “tapering plan” could be approaching if the US economic recovery quickly progresses past some recent stumbles and continues to strengthen. With several scheduled appearances this week, let’s see if we see that kind of language from other seats on the FOMC.

Tuesday: Fed Vice Chair Randal Quarles (FOMC voter) (10am EDT); Fed Governor Lael Brainard (FOMC voter) (2pm)

Wednesday: Philadelphia Fed President Patrick Harker (non-voter) (12pm EDT)

Thursday: Dallas Fed President Robert Kaplan (non-voter) (1pm) EDT; Philadelphia President Harker (2pm); Vice Chair Quarles (3pm)

Friday: Fed Chair Jerome Powell (FOMC voter) (7am 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.