by Craig Hemke, Sprott Money:
It’s a busy time of year, made even more volatile by the pending presidential election in the United States. The week ahead promises to be active, enough so that it seems wise to focus on the pending events in order to get you ahead of the game.
Again, there’s never a bad time to add to your stack of physical precious metal. However, everyone likes a deal, so if you can use the information below to monitor volatility and take advantage of possible price dips, you might come out ahead.
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U.S. Market Data and Its Impact on Gold Price Volatility
Let’s start with Tuesday, October 29—also known as tomorrow, as I type this on Monday. Besides an update on home prices and U.S. consumer confidence, the big event will be the latest job opening and quits data known as “JOLTS”. This data provides a look at the inner workings of the U.S. labor market and has often brought with it this year significant volatility for gold and silver prices. It will likely do so again this month, so be on the lookout at 10:00 a.m. ET when the data is released.
Economic Indicators to Watch: Payrolls, GDP, and Precious Metals Prices
Wednesday, the 30th, brings two key pieces of economic data within 15 minutes, conveniently timed for just before, and just after, the COMEX trading open. At 8:15 ET, we get the October payrolls update from private payroll service provider ADP. This number has been a little weaker than expected the past two months, so watch to see if it is again. Then, just as that’s being digested, we’ll get the first guess at Q3 U.S. GDP at 8:30 ET. Analyst estimates seem pretty optimistic for this measure of economic growth, so be on the lookout for a number that might surprise everyone. Either way, expect a very volatile first hour of trading for COMEX gold and silver.
PCE Inflation Data and Gold Price Predictions for This Week
Thursday promises to be interesting as we get the latest update on consumer inflation in the U.S. with the PCE and core PCE. This dataset is called Personal Consumption Expenditures, and it’s often referred to as “the Fed’s favorite inflation indicator“. With the next FOMC meeting slated for next week, this PCE data will be the last look at current U.S. price inflation before a decision is made to again cut the fed funds rate. As such, a “hotter” than expected PCE report might put pressure on gold and silver prices.
U.S. Payroll Data and Unemployment Impact on Precious Metal Investments
And finally, if we make it to Friday, we’ll get the latest U.S. payroll and unemployment data at 8:30 ET. At my website, we’ve always called these reports the “BLSBS”. Why? Because the reports are filled with easily-miscalculated data. Think about it this way: Friday is only the first day of November, so how in the heck can the Bureau of Labor Statistics provide any kind of accurate and honest reporting of how many jobs the U.S. economy added in October? The truth is, they can’t. Instead, the report is nothing but statistical guesswork and seasonal adjustments, and that’s the sort of stuff that is simple to misrepresent and misreport. As such, beware of any and all financial reporting on the headlines, but also be ready to perhaps make benefit of any market volatility that follows the release.
Gold and Silver Market Volatility from Global Events
Oh, and don’t forget, in between all of this will come random political headlines as well as geopolitical confrontations, so don’t think that each day’s action is complete once the U.S. data is released. Price volatility for gold and silver prices will continue 24/7.
Weekly Gold and Silver Price Targets: COMEX Insights
Lastly, as the week begins, let’s check the charts. Let’s see if we can come up with some price goals for when trading finally ends at 5:00 pm ET on Friday.
Let’s start with the Dec24 COMEX gold contract. As you can see below, prices have been on a tear since March 1, making the series of higher highs and higher lows that define a bull market. Any close this Friday above the previous intraweek high of $2773 set last Wednesday, the 23rd, will be quite bullish for early November, so keep an eye on that level.
