Good morning, traders; welcome to our market week preview, where we 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 have ridden some choppy waters to start the new week, as reverberations from the week prior had foreign exchange markets at a fever pitch to open Sunday night.
All things considered, it can be seen as a positive sign that the yellow metal has ultimately managed to hold and steady line after getting absolutely clobbered last week. As the markets continue to process the newest information from the Fed, gold prices this week (via the Dollar’s rise or retraction) may remain vulnerable to the mood of investors, without any major data points to drive fundamental-based trading.
US Economic Data to Watch
Thursday, September 29 at 830am EDT // Initial Jobless Claims
[consensus est.: +218K // prev.: +213K]
This particular week’s data drop for jobless claims is probably not going to be much of a market-mover. Still, in the wake of Jerome Powell making clear last week that the Fed would tolerate some degree of slowdown in the US labor market as collateral damage in its effort to mute inflation, we want to set a marker down to see if gold, being an asset very sensitive to the Dollar (meaning, sensitive to the Fed,) will have more tempered reactions to jobs data. (The idea being a stumble in the labor market does not immediately suggest temperance from the Fed.)
Friday, September 30 at 830am EDT // PCE Price Index (Aug)
[(core PCE) consensus est.: +4.7% YoY // prev.: +4.56%]
[(headline PCE) consensus est.: +6.1% YoY // prev.: +6.28%]
The markets are not expecting anything “new” from the comprehensive PCE report on inflation in the US, largely because markets have already received and (mostly) digested the CPI inflation data for the same period. The assumption would be that if the Fed’s preferred measuring stick(s) for inflation told a story that was at all different, then last week’s FOMC meeting wouldn’t have been nearly so hawkish. Despite the fact that the data will feel like a retread, keep an eye out for volatility in the gold and Dollar markets to wrap the week after investors are reminded again that “peak inflation” may still be around the bend.
FedSpeak this Week
It feels appropriate—if somewhat overwhelming—that an FOMC meeting that has left the markets with a new impression of just how aggressive the Fed’s near- to medium-term policy plan is gets followed up by the most crowded schedule of public remarks from key FOMC participants that we can recall, since 2020. Investors and other Fed-watchers will be looking for clues and commentary as to whether the Fed’s messaging from last week, which ran closer to “whatever it takes” than many expected, implies that the FOMC might still be looking to mellow the pace of rate hikes (going to +0.50% next time) while committing to keeping rates elevated for longer; or if it should be assumed that the super-steep hikes will continue until inflation pressures and morale improves. As a general rule, the more sway the individual participant has (or is perceived to have) on the FOMC, the more volatility markets could carry around their remarks.
Monday: Boston Fed President Susan Collins (FOMC voter) (10am EDT); Atlanta Fed President Raphael Bostic (non-voter) (12pm); Cleveland Fed President Loretta Mester (FOMC voter) (4pm)
Tuesday: Chicago Fed President Charles Evans (non-voter) (330am & 615am); Fed Chair Jerome Powell (FOMC voter) (730am); St. Louis Fed President James Bullard (FOMC voter) (955am)
Wednesday: Powell, Bullard & Fed Governor Bowman (FOMC voter) (1010am); Evans (2 pm)
Thursday: Bullard (930am); Mester (1pm)
Friday: Fed Vice Chair Lael Brainard (FOMC voter) (9 am); Bowman (11 am); Richmond Fed President Thomas Barkin (non-voter) (1230pm); New York Fed President John Williams (FOMC voter) (415pm)
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.