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.

Gold spot prices are starting the new trading week a bit on the back foot, as the overnight sessions saw bond yields creeping higher again, with the 10-year yield making a move towards 3% again.

Gold price still looks to have solid support this morning at $1850/oz. Having a strong baseline would serve the yellow metal well this week; with a relatively light economic calendar, gold prices may again be at the whim of the US Dollar’s trading patterns this week, leading up to the release of new inflation data on Friday morning.

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

US Economic Data to Watch

Thursday, June 9 at 830am EDT // Initial Jobless Claims

[consensus est.: +207K // prev.: +200K]

With the June FOMC meeting lined up for next week (which is the reason for this week’s lack of public appearances by any Fed officials,) there will be a little extra scrutiny on the weekly Jobless Claims number which has mostly lived around the mark of 200,000/week since reheating at the end of April. Basically, investors and analysts will be on the lookout for confirmation that the continuing improvement in the US labor market underlined by the better-than-expected May Jobs Report (released last week) will carry through June as well and allow the Fed to continue with their consecutive 50-point hikes through the summer. As has been the case since early spring: disappointment on this read is likely a plus for gold spot prices (as it suggests uncertainty for investors’ outlook, and, on the far edge, possible limitations on the Fed’s path of rate hikes); conversely, we could see gold prices soften if the Initial Claims number falls closer to +175K.

Friday, June 10 at 830am EDT // Consumer Price Index (May)

[(core CPI) consensus est.: +5.9% YoY // prev.: +6.2%]

[(headline CPI) consensus est.: +8.3% YoY // prev.: +8.3%]

Last week’s update on the state of the US labor market appears to clear the deck for the Fed to continue with its plans for aggressively tightening monetary policy so as to tamp down on inflation, without sending the most immediate warning signs of a recession. Still, virtually every market actor or observer still wants to see proof that the risky maneuver of slowing down the economy is yielding results; CPI data on price inflation remains the most direct way of judging the program’s impact. Assuming the numbers come in aligned with expectations, we should see signs of cooling inflation. Although the headline number is expected to remain static year-over-year from the April data set (and expected to jump markedly month-over-month,) the less volatile “core” inflation number is expected to comedown both on a monthly basis and YoY. The move doesn’t look likely to be aggressive, but the decline from a 6% to a 5%-handle may well be enough to grab investors’ attention and generate headlines. To that end, an on-the-money print or better is more likely to present a headwind for gold prices on Friday, as it will show a weakening in inflation pressures (fear of which traditionally drives gold buying) while affirming the Fed’s plans to continue raising interest rates into 2023. On the other hand, disappointing May CPI numbers would be a boon to gold valuations simply by reviving some of the demand for the yellow metal as an inflation hedge, which has drained away to some degree since the Fed began hiking.

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.