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 on the price of gold this week and beyond, as well as other key correlated assets.

Gold prices, for the first time in a few tries, have started the week off on the front foot, rising by more than $5/oz from Sunday evening’s open—not a gap higher, by any means, but certainly more positive than the yellow metal has trended for several sessions.

To be able to lay out all (or most) of the drivers behind this start, we’ll have to let the session and the week develop. And we should have a chance to make long-look observations because the data calendar is sparse and Fed officials are offline for the pre-FOMC quiet period. We can point to one specific tailwind for gold this morning, and it’s the one that we’ve said for weeks is not only helpful but necessary for any sustained rebound for gold prices: a US Dollar pullback. The weakness we’ve seen in the Greenback since Sunday evening pales in comparison to last week’s +1% surge (to say nothing of the tear that USD has been on since March,) but it nonetheless is allowing gold some breathing room to rise and we’ll be tracking this through the week.

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

US Economic Data to Watch

Thursday, July 21 at 830am EDT // Initial Jobless Claims

[consensus est.: +240K // prev.: +244K]

With FOMC officials in the pre-meeting silent period and unable to (openly) impact this week’s market narratives, we can expect a lot of back-and-forth over whether last Friday’s strong Retail Sales report and other data points, combined with the overly hot CPI inflation print for June, could put the Fed in a position where they both feel compelled to maintain/increase their aggressive tightening pace, and have the macroeconomic runway to do so because the US economy seems able to bear it. To abet that narrative, of course, the market may need to see more evidence of a resilient US economy and will be looking for the labor market to chime in. Initial claims are riding a little high relative to where they were at the start of Q2; but not so high as to worry anyone. Yet. An as-expected number this week, or even an upside surprise, probably doesn’t impact the gold market much (or the Dollar market.) A disappointing read, proportional to just how disappointing it might be, could be a moderate tailwind as it would peg the Dollar back in equal measure.

Thursday, July 21 at 830 EDT // Philadelphia Fed Mfg. Index (July)

[consensus est.: 0.0 // prev.: -3.3]

Another data set that could continue clearing the way for the Fed’s path to higher interest rates (which continues to be a generally negative prediction for the gold market) is the key trackers of the health and expansion of the US manufacturing sector. A strong reversal of the recent downturn (resulting largely from inflation pressures and underlying supply chain problems) could also clear a wide berth for the Fed to tighten aggressively with +0.50% to +0.75% rate hikes through Q3. It mostly flew under the radar on Friday, given the attention paid to the strong Retail Sales number, but the New York Fed’s regional manufacturing survey returned much more positive results than expected (even if the components tracking firms’ outlook for the future was bleak.) A repeat (our)performance from the Philly Fed’s version, without bigger news to draw or defuse attention, might be a drag on gold prices as the market reaction could push the US Dollar (index) back above 108, if it hasn’t rebounded by Thursday morning.

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.