19-Jan (USAGOLD) — Gold eked out a new 4-week high at 1669.70 in overseas trading before retreating back within the range. A generally softer tone in the dollar is seen as broadly supportive to the yellow metal as is heightened talk of possible further Fed accommodations to support the moribund economy.

The perception is that tepid inflation data gives the central bank room to do more as growth prospects continue to languish under the burden of an oppressive and growing debt load, along with ongoing uncertainty surrounding Europe. While today’s news that initial claims fell by 50k is encouraging on the surface, drilling a little deeper into the data leaves you with a sense that the jobs picture remains quite clouded. While both initial and continuing claims are trending gradually lower, so is the labor force participation rate. Any headway that we might be making on the headline numbers is simultaneously being eroded behind the scenes.

The market appears largely nonplussed about that big headline number, in part because of disappointing Dec housing starts. Starts fell 4.1% in in Dec, a bigger slow-down than was expected, offsetting the pretty decent print seen in Nov. Continued weakness in housing may also incite Fed action. In fact, much of the recent speculation about likely Fed action has centered on move back into the MBS market.

The FOMC holds a two-day meeting nest week on Tuesday and Wednesday.

• Philly Fed index rose modestly in Jan to 7.3, below market expectations of 11.0, vs a big downward revision in Dec from 10.3 to 6.8.
• US CPI unch in Dec, below market expectations of +0.1%; core +0.1%, in-line with expectations.
• US housing starts -4.1% in Dec to 657k pace, below market expectations of 676k.
• US initial jobless claims -50k to 352k in the week ended 14-Jan, well below expectations of 385k, vs upward revised 402k in previous week.
• Eurozone current account (sa) -€1.8 bln in Nov, vs -€6.6 bln in Oct; +€1.0 bln (nsa).
• New Zealand Q4 CPI -0.3%, vs +0.4% in Q3.
• Australia employment -29.3k in Dec; unemployment rate steady at 5.2%.
• Philippines central bank cuts overnight borrowing rate by 25bps to 4.25%.
• Hong Kong unemployment rate (sa) ticked lower in Dec to 3.3%, vs 3.4% in Nov.