GoldPrice.

Happy Friday, traders. Welcome to our weekly market wrap, where we look back at these last five trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets—and may continue to into the future. 

Having given back most of a climb to one of the highest levels of all time for gold, the yellow metal is still looking to close the week with a gain, having consolidated above a major historical marker.  

So, what kind of week has it been? 

US inflation—the projection of it, the expectations of the Fed's efforts to combat it, and the reporting of updated numbers (hard and soft)—has not been out of the driver's seat of markets for any long stretch of time over the last two years, but was very evident at the fore of gold's price action this week. Initially, it was the en-masse table setting by investors and managers Monday and Tuesday, ahead of the midweek CPI report, that got largely credited with the yellow metal's steady climb higher in spot prices. In this 45-degree trip higher, gold topped out Tuesday night just below resistance at $2020/oz before settling into a stage at $2010 immediately pre-CPI. This move (and similar, that primarily saw the US Dollar Index and yields on benchmark Treasuries softening at the same time) was mostly based on an expectation that cooler inflation data would encourage the reality of the rest of 2023 to better fit the market's preferred projections of a pause to rate hikes and a rate-reduction before Christmas. 

The data itself certainly played along, with core CPI printing the expected "slowdown" from both a month-over-month and an annualized tabulation and headline inflation easing by more than projected, reporting only a +0.1% rise in prices in March. The early week trends mostly continued, of course, with gold edging up to $2015 on the day after some whipsaw trading before and during the market opening. US equities cheered the numbers and their (possible) implications as well, climbing in the morning. 

The move was muted a bit in the afternoon when the release of FOMC discussion minutes from the March meeting outlines a still very hawkish Fed; one maybe not be so likely to be swayed by the morning's consumer inflation numbers. A retracement in market sentiment ultimately drove the major stock indexes slightly into the red for the session as Treasury yields, and the Dollar rebounded. In a positive signal for gold traders, spot prices mostly flattened out post-FOMC minutes rather than dipping. This may have been thanks to the minutes signaling that the FOMC is preparing for some level of recession in 2023, which would have eliminated a lot of risk appetite for some investors. 

With overseas markets getting a better opportunity to trade both Wednesday's inflation data and FedSpeak, gold continued climbing overnight and into the early morning hours of Thursday. Before the day's data sets, the yellow metal had climbed to a position of just $2030/oz, a surprisingly cool number for producer price inflation in the US (which is strongly supportive of the projection that the Fed's crusade is finally pushing overall inflation lower) sent gold ripping higher. That afternoon, after leveling out the trade, gold spot notched bids above $2040/oz, with CME futures contracts for gold settling at the second-highest price in history. 

Any quick glance at gold's chart for the week shows that Friday has been a slide for the precious metal's pricing. A clear headwind for gold has been a US Dollar resurgence here at that end of the week. This has been (somewhat spuriously) tied to Friday morning's poorer than expected Retail Sales numbers, which suggest the US consumer is starting to crack (more deeply) under the pressure of the Fed's hiking cycle. The more likely culprit is commentary made by Federal Reserve Governor Christopher Waller, released to the public around the same time, effectively doubling down on the need for the Fed to continue raising rates higher to combat inflation. It is of large consequence that this wasn't stale commentary (like the FOMC meeting minutes) that was formed before this week's inflation data but in spite of it. While hopes and expectations for more accommodative monetary policy in 2023 have been dashed, again, the US Dollar and UST yields have soared, and gold prices have given back most of the gains made in April so far.  

Vitally, for gold's forward projections, there appears to be a strong contingent of buyers just above the major psychological level of $2000/oz, so even Friday's steep sell-off has never really looked like pushing gold below it. This may bode well for gold prices next week, as a relative dearth of economic news and data on the schedule could allow the commodity room to run. 

For now, traders, I hope you can get out and safely enjoy your weekend for the next couple of days. After that, I'll see everyone back here at the end of another profitable week.