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 this morning are considerably higher than Sunday night’s opening bids, trading near a premium of roughly $20/oz to that starting mark. With US (and international) equity markets looking a little bit directionless so far, the yellow metal is probably getting some of its lift this morning from a rebound in other parts of the commodities complex, including crude oil and iron ore. It’s possible that a tumultuous weekend in the crypto space has also driven some investors back towards gold as a more traditions “hedge.”

As Friday’s trading wrapped, I had questions about whether we’d see profit-taking around the $1840-50/oz level present difficult resistance for gold; it clearly hasn’t been an issue so far on Monday. The downturn in some of the recently booming raw commodities that happened last week appears to have dissipated, and gold’s strong start to the week (pulling silver with it) certainly suggests that the precious metals will be resistant to a larger pull-back in things like lumber and copper—to a point. Despite unilateral start to gold’s trading week, I’ll continue keeping an eye on these two relationships in particular as we move through what looks to be a quieter week on the data front.

US Economic Data to Watch

Wednesday, May 19 at 2pm EDT // FOMC Meeting Minutes

Because Powell & Co. had to spend quite a bit of airtime, like they did in the month prior, essentially defending the Fed’s new framework (for holding monetary policy at ultra-easy levels until the US economy experiences consistent inflation above 2%, rather than merely projecting higher prices,) it’s unlikely that the discussion notes from the April FOMC meeting will reveal any new details of Fed’s outlook or plans. Although It’s not impossible that the meeting’s minutes could point to which FOMC members are more faithfully committed to the current path than others. Like most of this week’s macro calendar, traders and analysts will look at Wednesday’s release less as a possible point of market movement and more as additional information for refining models and medium-term projections.

Thursday, May 20 at 730am EDT // Philadelphia Fed Manufacturing Index (May)

[consensus est.: 41.5 // prev.: 50.2]

The previous month’s Philly Fed number far exceeded expectations and turned in the highest level since the early 1970s, aligning with the recent outperformance we’ve been seeing in manufacturing activity (as well as service sector PMI) throughout the US as vaccinations and re-openings spur the American economy towards recovery (hopefully.) While I pullback is broadly expected this week, and rightfully so, a full 10-point drop seems very steep and, indeed, there are more than a few research desks projecting something milder like a print around 45.0. Either way, I anticipate an as-expected print—presuming there’s not any noise created by the release of Initial Jobless Claims at the same time—to present a brief headwind to the “reflation trade” in equities and commodities. “Brief” being the key word. An upside surprise, on the other hand, might supercharge the march higher in the S&P, the Dow, and maybe gold prices as well.

Thursday, May 20 at 730am EDT // Initial Jobless Claims

[consensus est.: +455K // prev.: 473K]

The number of new unemployment claims filed continues to drop more quickly than estimated week-to-week; This is objectively a good thing, but investors and analysts are probably still feeling a little too burned by the poor April Jobs Report two weeks ago to really celebrate improving weekly data. What seems key this week is that a drop to around 450,000 (as expected) would bring the 4-week average down to nearly 500K. There’s still a long way to go before reaching pre-pandemic stability in the US labor market, but it would be a reassurance that the economy is still marching towards recovery.

FedSpeak this Week

Last week’s stronger than expected read on consumer inflation (via CPI) and the brief panic it pushed markets into will be the main point of interest when parsing the public remarks and discussions by FOMC officials this week. Disappointingly, none of the most relevant appearances are scheduled to follow the release of April’s FOMC meeting minutes on Wednesday, so reporters won’t be able to immediately follow up on any new color received there.

Monday: Fed Vice Chair Richard Clarida (FOMC voter) (10am EDT); Vice Chair Clarida & Atlanta Fed President Raphael Bostic (FOMC voter) (1030am); Dallas Fed President Robert Kaplan (non-voter) (6pm)

Wednesday: St. Louis Fed President James Bullard (non-voter) (10am); Atlanta Pres. Bostic (1130am)

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.