Gold: Next week's key macroeconomic events to keep an eye on

The troy ounce of the precious metal closed the week in the negative territory for the first time since early June and lost nearly $90 to $1,944. An overdue technical correction, profit-taking and relatively upbeat market mood made it difficult for gold to extend its rally. 

Coming up next week

The first half of the week will be relatively eventless. Japan will release its second-quarter Gross Domestic Product (GDP) and Industrial Production data on Monday. A more severe contraction in Japan's economic activity than expected could cause investors to stay cautious and help gold gather strength.

On Wednesday, the FOMC will release the minutes of its July meeting. During the press conference, FOMC Chairman Jerome Powell refrained from making any changes to the forward guidance or the near-term policy outlook. The Fed is largely expected to wait until it finishes its policy review in September before deciding on its next move.

On Thursday, weekly Initial Jobless Claims data from the US will be watched closely by the market participants. The latest report published by the US Department of Labor showed that there were 963,000 applications for unemployment benefits, first reading below one million since March. If this number continues to decline, it could have a positive impact on market sentiment and hurt the demand for the safe-haven gold. 

On Friday, the IHS Markit will release its preliminary Manufacturing and Services PMI data for Germany, the euro area and the United States. Investors expect economic activity in the US manufacturing sector to continue to expand in August. However, if the PMI drops below amid the resurgence of the coronavirus and shows a contraction, it could trigger a fresh wave of flight-to-safety and provide a boost to the precious metal.

Economic calendar