Issue 10 – The week of April 18th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• US NAHB housing market index. A dual measure of overall economic health and employment demand. A strong number indicates inflationary pressures are still strong which is bullish for precious metals.

Tuesday

• CAD housing starts. A dual measure of overall economic health and employment demand. A strong number indicates inflationary pressures are still strong which is bullish for precious metals.
• US Redbook index. A private analysis of retail sales is used to help verify government retail sales reports. Strong sales are a sign the economy is healthy but could put upward pressure on inflation is bullish for precious metals.
• US API weekly crude oil stocks. A measure of economic demand-supply chain efficiency. Falling stocks show high demand and/or supply chain disruptions. This would be bullish for precious metals.

Wednesday

• US IMF meeting. Agenda not published yet but almost certain to focus on the war in Ukraine, covid lockdown in China and contagion to the global supply chain.
• CAD Consumer Price Index. An overall change in prices paid by consumers. A rise indicates inflation pressures are still strong and bullish for precious metals.
• CAD New Housing Price Index. Indicates inflation pressures on the overall economy. A rise in prices shows inflation still climbing which is bullish for precious metals prices.

Thursday

• CAD Employment Insurance Beneficiaries Change. Net change to the number of people receiving EI benefits. A positive number bearish for C$ and bullish for precious metals.

Friday

• CAD retail sales. A measure of national economic health and disposable income. A strong sales report is bullish for the C$ and bearish on precious metals.
• CAD Industrial product price index. A measure of raw commodity prices. An early indicator of inflationary pressures. A rise in this index is bullish for precious metals.

Geopolitics

Oh what a tangled web is being woven. Subtle changes are being felt throughout the web that is the global economy. Some affect the world quicker than others some changes have not yet come to fruition.

Supply chain disruptions remain an ever-growing albatross on the global economy. Employers are learning that they need to offer higher wages to attract staff. But partisan politics is still the biggest wrench in the cogs. Some 40% of China’s GDP regions remain under lockdown as they strive to achieve zero Covid-19 cases. Shanghai is scheduled to have its lockdown lifted this week but It wouldn’t be surprising to see that continued.

The slowdown at the Texas Mexican border has forced Greg Abbott to acquiesce and allow goods to cross the border in a less restrictive manner. The slowdown will affect food prices across the US and Canada with shortages already occurring the further markets are from the US Mexican border. The estimated costs of this artificially induced supply chain disruption are $470 million per day.

The war in Ukraine is getting perilously close to expanding beyond its current theatre of action. Ukraine may have said it won’t join NATO, but they are actively working on an application to join the EU. Finland and Sweden are also prioritizing whether to join NATO to which Russia is responding with great sabre rattling and gnashing of teeth.

The Call

Given last week’s huge inflation report from the US and growing global supply chain issues the outlook for precious metals this week is rather bullish. A run to the 2000 level should not be unexpected and a weekly close above there would be very bullish.

Last Week in Review

We had a shortened trading week due to the Good Friday market closings in London and New York.

The big news was the inflation report showing inflation at 8.1%, the highest level in 40 years. Precious metals prices immediately jumped up with that news.

Supply chain disruptions only grew last week further exacerbating stretched resources.

	Gold	Silver
Open	1947	24.81
High	1981	25.89
Low	1940	24.68
Close	1973	25.69