Key events to affect XAU/USD prices (July 01-05)
Every Sunday, I’m posting a weekly list of upcoming financial events and data releases. These are crucial for Gold traders, as they provide insights into economic trends and global bank policies that can have a major effect on the Gold market.
Hello, fellow traders!
Next week, we’ve got a packed calendar of key economic events and data releases from major economies like the United States, Europe, and China.
The spotlight will also be on central bank communications, with particular attention to Fed Chair Powell's speech and the release of FOMC minutes.
These events, along with geopolitical factors like the upcoming UK general election, have the potential to influence investor sentiment, monetary policy expectations, and consequently, the direction of Gold prices in the short term.
Let's dive into the specifics and see what events we should be keeping an eye on:
Monday, July 01
China Caixin Manufacturing PMI: basically a health check for China's manufacturing sector based on a survey of purchasing managers at manufacturing companies.
Why it matters for Gold: Given how big China's economy is, their manufacturing health can definitely make waves in the Gold market. If the PMI is weak (below 50 or falling), it could signal economic troubles in China. Investors might get nervous and look for safer bets, which can boost demand for Gold, pushing prices up.
Japanese Consumer Confidence: a monthly survey that shows how people in Japan feel about the economy.
Why it matters for Gold: High consumer confidence usually means people are feeling good about spending money and are less interested in safer investments like Gold. Low value, on the other hand, might be bullish for Gold since people look for ways to protect their money during economic uncertainty.
Germany Inflation Rate YoY Prel: measures the percentage change in the overall price level of goods and services in the German economy compared to the same month of the previous year.
Why it matters for Gold: Higher inflation often leads to increased demand for Gold as a hedge. Plus, rising inflation may erode the purchasing power of fiat currencies, making Gold more attractive. However, if he European Central Bank (ECB) raises interest rates due to high inflation, it could potentially exert downward pressure on Gold prices.
US ISM Manufacturing PMI: a monthly survey of purchasing managers that measures the health of the American manufacturing sector.
Why it matters for Gold: A weak PMI below 50 means the manufacturing sector is contracting. This might cause looser monetary policy, a weaker US dollar and bullish support for Gold as investors seek safe-haven assets.
Tuesday, July 02
Australia RBA Meeting Minutes: the notes from the Reserve Bank of Australia's (RBA) about their discussions on interest rates, inflation, employment, and the overall economy.
Why it matters for Gold: In simple words, if the minutes hint at higher interest rates, Gold might take a hit. Lower rates or a dovish tone could give gold a boost.
EU Inflation Rate YoY Flash: measures how fast prices are rising across the European Union compared to the same time last year.
Why it matters for Gold: Higher inflation often makes Gold more attractive since it’s a safe way for investors to protect their wealth when prices are rising fast.
Fed Chair Powell Speech: hint at future Fed decisions on interest rates or other policies.
Why it matters for Gold: If Powell suggests higher rates are coming, Gold prices might drop. Hints of steady or lower rates could boost Gold.
US JOLTS Job Opening: measures the number of job openings and gives a snapshot of how many jobs are available and how people are moving between jobs.
Why it matters for Gold: The Fed watches JOLTS data closely when making decisions. Strong job markets might lead to tighter monetary policy and bearish impact on Gold. Good jobs data can also strengthen the U.S. dollar. potentially reducing demand for Gold.
Wednesday, July 03
Canada Balance of Trade: measures if Canada sells more than it buys, or other way around.
Why it matters for Gold: A strong trade balance can boost the Canadian dollar, which might indirectly pressure Gold prices. A weak trade balance could lead to economic uncertainty, potentially increasing demand for Gold as a safe-haven asset.
US ISM Services PMI: measures the health of the American services sector, which includes things like retail, finance, and healthcare.
Why it matters for Gold: A strong Services PMI usually signals a robust economy, leading to higher interest rates and reduced demand for Gold. But if the PMI suggests rising inflation in the services sector, it could support Gold prices as investors seek inflation hedges.
US FOMC Minutes: notes from the Federal Reserve's policy-setting meetings, revealing what Fed officials are thinking about inflation, employment, and overall economic health.
Why it matters for Gold: If the minutes suggest a more aggressive stance on raising interest rates, it typically puts downward pressure on Gold. Hints of economic concerns or a dovish tone from Fed members often boost Gold's appeal as a safe-haven asset.
Thursday, July 04
Australia Balance of Trade: measures if Australia sells more than it buys, or other way around.
Why it matters for Gold: A strong trade balance can boost the AUS dollar, which might indirectly pressure Gold prices. A weak trade balance could lead to economic uncertainty, potentially increasing demand for Gold as a safe-haven asset.
UK General Elections
Why it matters for Gold: Political uncertainty leading up to and potentially following the election could increase demand for Gold as a safe-haven asset. If the election results suggest major policy changes that could impact the UK economy, it might cause volatility in the British pound, indirectly affecting Gold prices.
Friday, July 05
US Nonfarm Payrolls: shows how many new jobs were added to the US economy, excluding farm workers and a few other job categories.
Why it matters for Gold: Weak employment numbers might increase Gold's appeal as a safe-haven asset due to economic uncertainty.
US & Canada Unemployment Rate: a key measure of the job market's health and the overall state of the economy.
Why it matters for Gold: A falling unemployment rate often signals a strengthening economy, which can reduce demand for Gold as a safe-haven asset. But if low unemployment is accompanied by wage inflation fears, it could support Gold prices as investors seek inflation hedges.
Canada Ivey PMI s.a.: a quick snapshot of whether the economy is expanding or contracting, based on factors like employment, inventories, and deliveries.
Why it matters for Gold: A strong Ivey PMI can boost the Canadian dollar, potentially putting indirect pressure on Gold prices as they're often inversely related. If the PMI suggests economic weakness, it might increase interest in Gold.
Safe trading,
and remember: All that glitters is not Gold,
Joe