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 well off the pace to kick-off the US trading week, having lost considerable ground since the global markets re-opened on Sunday evening. The yellow metals has managed to send out some positive signals since the start of cash trading in US markets, paring back roughly $15/oz worth of loses and consolidating in the hours since.

The strongest headwind for gold prices continues to be the clear lack of risk-aversion across global development markets at the moment—as an investment the yellow metal simply seems devoid of interest or support relative to better “yielding” bets on equity markets. With the major US indexes mixed so far to start the week, it will be important to watch whether or not a stronger session for stocks will pull gold prices along with it or leave precious metals lagging behind.

For now, let’s have a look at the calendar for the week ahead.

US Economic Data to Watch

Tuesday, June 15 at 830am EDT // Retail Sales (May)

[consensus est.: -0.6% MoM // prev.: 0.0%]

The mild contraction in retail sales activity (month-to-month) that analysts expect to see in the May data is almost entirely a result of continued correction from the massive spike in retail growth that the last round of direct stimulus payments delivered in March; As such, it should be fairly priced into US Dollar markets and should not cause much of a stir and I think the same should go for a (reasonable) beat. It’s a little harder to predict how the markets might react if the data comes in more depressed than expected (say, closer to -2%.) Markets would definitely have cause for concern about the next steps of the US economic recovery; Given the trading patterns of the last few sessions, it seems like the immediate reaction would see investors stream into USD positions, weakening gold’s price chart.

Wednesday, June 16 at 2pm EDT // FOMC Interest Rate Decision

[No meaningful changes to monetary policy are expected.]

With the recent performances of top-tier macroeconomic data tracking the US recovery (recent spikes in price inflation tempered by slowing in the labor market rebound,) analysts and Fed observers seem comfortable projecting the FOMC might include a nod towards beginning to taper at the annual Jackson Hole meeting in August, but not before. This month, then, we can expect Powell to hold the line on this month’s inflation being a transitory issue and holding monetary policy at ultra-easy positions to be the right course of action. There will be some interest in how the committee might adjust the language in its post-meeting statement which has regularly included the now-inaccurate reference to inflation running persistently below 2%. All things considered, though, it seems like the interest rate (non)decision and the committee statement will be fairly uneventful for US Dollar and gold markets (after the usual spasm of algo trading, of course.)

Since this is also a quarterly FOMC meeting, the moment will also include an updated batch of economic projections from the Fed and the focus will be on how much participants might adjust their growth, inflation, and interest rate projections (if at all) in light of the recent surge in inflation. At the moment, the “smart money” allows that some anonymous committee members might elevate their expectations for inflation slightly, but opinions are split on whether this will be enough to forecast an interest rate hike before the end of 2023. If the consensus projections remain unchanged, then there’s not much to look for in a sustained market reaction; Gold prices might see a lift from inflation expectations shifting higher. If an earlier rate hike does show up on the new consensus dot plot however, gold prices may come under some acute, heavy pressure as Treasury yields are likely to spike.

Thursday, June 17 at 830am EDT // Initial Jobless Claims

[consensus est.: +360K // prev.: +376K]

For the third week running the Initial Jobless Claims tally will be overshadowed by other events on the data calendar; This week, it will be the hangover of market focus on Wednesday’s FOMC. Supportive of the consensus expectation that the Fed will announce tapering before (but close to) the end of the year, the rate of new unemployment claims has continues to slide lower. Economists and investors will look for that longer term trend to be reaffirmed this week.

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.