Guardian Weekly Market Report

Issue 90 – The week of November 6th, 2023

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

This week will be a very quiet one as there are few key economic reports coming out on this shortened week with Veterans Day on Friday.

• Monday there are none scheduled.
• Tuesday at 8:30 AM we get the September U.S. Trade Deficit with a median forecast at -$60.3B. The New York Fed will issue its quarterly report on household debt and credit which will be released at 3:00 PM.
• Wednesday will see the release of Wholesale Inventories for September which are expected to be unchanged at 10:00 AM.
• Thursday morning sees the weekly Initial Jobless claims at 8:30 AM. and then at 2:00 PM Fed Chair Jerome Powell will be on a panel at the IMF.
• Friday is the Veterans Day holiday and there is one report being released. We’ll get a timely consumer sentiment reading from the University of Michigan which will issue its Consumer Sentiment Index for September.

Geopolitics

Sam Bankman-Fried, the founder of the now-bankrupt cryptocurrency exchange FTX, has been convicted of fraud in a case that cheated customers and investors of over $10 billion. After a month-long trial, a New York jury rejected Bankman-Fried’s claim that he never intended to defraud customers before FTX’s collapse. He now faces a sentencing date of March 28 for seven counts of fraud and conspiracy. This case has been one of the highest profile white collar court proceedings since Bernie Madoff’s  in 2009. 

House Speaker Mike Johnson and Majority Leader Steve Scalise defended cuts to IRS funding in a bill that provides about $14 billion in aid to Israel during its conflict with Hamas. The bill passed in the House but is unlikely to pass the Senate, and President Biden has vowed to veto it. The Republican lawmakers argue that they want to offset the spending to support international allies rather than add to the deficit. Some Democrats opposed the bill because it includes IRS funding cuts intended to strengthen tax enforcement and bring in more revenue. 

Pakistan’s abrupt decision to deport around 1.7 million undocumented foreign nationals, primarily Afghan migrants, has sparked significant international concern. While Pakistan cites national security issues and allegations of Afghan involvement in criminal activities as reasons for the crackdown, the Afghan government has denied these claims. The hasty deadline for deportation led to approximately 140,000 Afghans leaving Pakistan recently. For many of these migrants who have grown up in Pakistan, returning to Afghanistan represents an uncertain and unsettling prospect. Amid this crisis, there have been calls for Pakistan to collaborate with the U.S. to resettle qualifying individuals in America to prevent them from returning to a potentially perilous situation in Afghanistan. This move underscores the complex geopolitical dynamics in the region and the humanitarian and security challenges that persist, particularly as Afghanistan continues to grapple with internal issues.

A strong earthquake hit northwestern Nepal just before midnight on Friday, leaving at least 128 people dead and dozens injured, with the death toll expected to rise. Communications with many affected areas have been cut off. As dawn broke, rescue helicopters and security forces rushed to the region to assist with medical care and rescue efforts. The quake, with a preliminary magnitude of 5.6, was felt over 500 miles away in New Delhi, India. Earthquakes are not uncommon in Nepal, with a devastating 7.8 magnitude quake in 2015 killing around 9,000 people.

The Call

Gold finished the week just under $2,000 an ounce at $1,992 per ounce. The Geopolitical tensions have continued in the war between Israel and Hamas with the ground assault in full swing.  The bombing of Gaza has continued nonstop since October seventh and a ceasefire is being demanded by citizens around the world without any affect. Israel is refusing for now, but this must change soon. When this happens, Gold and Silver will pull back initially from there over bought territory to support levels in the $1900 to the $1950 area for Gold and Silver to the $22.00 to $22.50 level. With inflation still high around 4.0%, interest rates hovering around 5.25%, and oil which is going up and down like a yoyo, we expect Gold and Silver to bounce back and move higher into the year end. 

Last Week in Review

Gold opened Sunday evening at 2005.90 spot and then in choppy action traded lower making the weekly low on Wednesday at 1970.60. Gold then traded sideways until the release of the nonfarm payrolls number at 150,000 jobs created which was lower than the consensus at 190,000 jobs. After spiking higher Gold drifted lower to settle the week at 1992.20.

Silver opened at 23.16 on Sunday evening and traded higher to its high of 23.67 on Monday afternoon. By midweek Silver had moved lower to 22.56 before bouncing to 23.16 early Thursday morning only to retreat again until the nonfarm payroll spike on Friday morning. The spike took us up to 23.33 and closed out the week at 23.25 an ounce.

• The U.S. Dollar Index finished down on the week higher at 105.02.
• The Gold/Silver Ratio closed a little stronger for the week at 85.9 ounces of silver for 1 ounce of gold.