This week, the latest US earnings season kicks off. Unlike Australia, where companies have to report their latest numbers every six months, the United States runs a quarterly earnings schedule as the norm. That means investors get to analyse almost every company's numbers every three months. This, in effect, means that it's almost always 'earnings season' in America. But that doesn't make it any less exciting. And this one could be particularly so for the gold price.
This week, things kick off with the likes of Johnson & Johnson, JP Morgan, Netflix, and PepsiCo.
Next Monday, 21 July, we'll hear from Verizon Communications and Domino's Pizza. Coca-Cola Co and Phillip Morris International will report on Tuesday, followed by Alphabet, Tesla, and ServiceNow on Wednesday. On Thursday, Blackstone and Intel will join them, followed by Phillips 66 and AON on Friday.
So a big few weeks ahead for US companies, and the ASX investors who follow them too.
Every earnings season is consequential. But this one might be followed a little more closely than normal by global markets. That's thanks to the ongoing uncertainty surrounding the US economy, mainly stemming from the economic and trade policies of the current White House.
One metric I'll be watching is the gold price.
Normally, gold prices move fairly independently of stocks during earnings season. However, this time could be different, to use that dreaded cliche.
The markets may seem happy and optimistic at the moment. But they can turn on a dime, as Trump's 'Liberation Day' tariff announcements on 2 April confirmed.
Image source: Getty Images
Why is the gold price on watch this US earnings season?
Gold is essentially a crisis asset. Investors tend to flock to its perceived 'safety' during times of economic or geopolitical uncertainty.
Given the unfavourable developments on the global stage over the past two or three years, it's easy to see this in action. At the beginning of 2022, before the Russia-Ukraine War began and before the 7 October 2023 attack on Israel, gold was going for around US$1,800 an ounce. Today, that same ounce will set you back just over US$3,360 after climbing as high as US$3,500 back in April.
Of course, US economic policy under the Trump Administration has arguably not helped to lower gold prices. Trump himself has threatened, and implemented, massive tariffs on many other large economies, threatened to fire the chair of the US Federal Reserve for refusing to heed his wishes, and ushered in a budget that looks certain to entrench American fiscal deficits for as far as the eye can see.
It's my belief that if we see any hint of these policies beginning to damage the US economy this earnings season, through either lower growth or higher inflation (or both), it could spark a rush to gold.
Of course, that is just speculation. Neither I nor anyone else has any idea what could come up over the next few weeks. If it's decent numbers across the board, gold could well push lower from its current levels. But regardless of what we see, this US earnings season could be the most consequential for the yellow metal that we've seen for a while.
