Guardian Weekly Market Report
Issue 100 – The Week of January 15th, 2024
Key Resistance and Supports: Upcoming Week
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Reports of Note due out this week:
Markets are closed on Monday January 15, for Martin Luther King Jr. Day. World Economic Forum meeting in Davos begins (Jan 15 – Jan 19)and is to focus on AI and global conflicts.. On Friday, Congress faces a spending deadline to fund some U.S. government agencies as shutdown looms..
- Monday the markets will be closed for the Martin Luther King Jr. Holiday
- Tuesday at 8:30 AM we get the Empire State manufacturing survey.
- On Wednesday, there are numerous reports including U.S. Retail Sales, Import Price Index for December, Industrial production and Capacity utilization and finally the Federal Beige Book.
- Thursday morning sees the weekly Initial Jobless claims at 8:30 AM. along with Housing starts and Building Permits for December along with the Philly Fed Survey.
- Friday marks the deadline to avert a federal government shutdown. Coming into the week, congressional leaders had reportedly reached a deal on short term funding after agreeing earlier in the year to a top-line discretionary spending cap of $1.66 trillion (1,660,000,000,000.00). At 10:00 AM we see the release of Consumer sentiment (prelim) and Existing Home Sales.
Iran’s seizure of an oil tanker in the Gulf has caused a more than 2% surge in Brent crude oil prices, reaching $78.40 a barrel. The tanker was en route to Turkey when armed individuals directed it to an Iranian port. This incident, reportedly in retaliation for the US seizing the same vessel last year, raises concerns about heightened tensions in the Middle East and potential impacts on global oil prices. The UK government has modeled scenarios indicating that disruption in the Red Sea could further shrink its economy, considering a potential rise of at least $10 per barrel in international crude oil prices and a 25% increase in natural gas prices. Rising oil prices can lead to increased fuel costs and higher inflation.
The U.S. and British military conducted air strikes in Yemen against Iran-backed Houthi forces in response to attacks on Red Sea shipping. U.S. President Joe Biden stated that the strikes aim to deter threats to personnel and safeguard freedom of navigation. The Houthis, responding with vows of retaliation, have been targeting shipping lanes. Concerns about potential disruptions to oil supplies led to a rise in oil prices. This geopolitical development, amid ongoing conflicts in the region, including Israel’s war in Gaza, has implications for global markets, particularly in terms of energy prices and potential impacts on supply chains. The situation highlights the complex geopolitical landscape influencing market dynamics.
Taiwanese voters elected Vice President Lai Ching-te as the next president, defying Beijing’s warnings against supporting a “separatist.” China considers Taiwan its territory and has not ruled out force. Lai’s victory extends the Democratic Progressive Party’s (DPP) rule, known for its strained relations with Beijing. Despite the win, the DPP lost control of the legislature, constraining policy options. Lai emphasized continuing foreign affairs and national defense in line with previous policies. China warned against Lai’s election, stating it couldn’t stop the reunification trend. The U.S. welcomed Lai’s victory, affirming commitment to cross-Strait peace. Concerns arise about China’s response, potentially affecting global dynamics.
Saturday marked 100 days since the surprise attack by Hamas terrorists into Israel, resulting in a prolonged and destructive conflict. Israel responded with a military campaign in Gaza, causing significant casualties and displacement. Global protests call for an end to the war, and families of hostages held by Hamas in Gaza demand action in Tel Aviv. Inside Gaza, ongoing attacks have displaced most of the population, leading to a severe humanitarian crisis. The conflict escalates tensions regionally, with concerns about a wider war.
Gold has some bullish momentum going forward, and it is likely that gold will try to test the 2090.00 to 2100.00 area on the upside. Interest rate cuts are the favorite topic these days and we believe it will take longer for rates to fall than most have been calling for. This will cause gold and silver to trade sideways in a narrow range. As a result of this we would expect Gold to trade between the support at 2000.00 and the resistance at close to 2100.00. We remain bullish and think Gold can make a new high in the 2300.00 area and Silver towards 28.00 an ounce during 2024.
Last Week in Review
Gold opened Sunday evening at 2047.80 spot and then traded lower into Monday morning making a low at 2017.80 before bouncing back to 2043.70 Tuesday afternoon. We then traded in a range until the CPI numbers Thursday morning which spiked gold higher to just over 2050.00 before selling off to make the weekly low at 2012.50. Late Thursday gold started to rally on news of the USA/British attack on the Houthi militia in Yemen and hit the weekly high of 2062.50 Friday afternoon before settling at 2048.70.
Silver opened at 23.22 on Sunday evening and like Gold drifted lower into Thursday morning making a low of 22.47 before rallying back up to make weekly highs of 23.56 Friday afternoon. A small retreat finished off the week with silver closing at 23.20.
- The U.S. Dollar Index finished the week at 102.15.
- The Gold/Silver Ratio closed a little weaker for the week at 88.4 ounces of silver for 1 ounce of gold.
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The information contained in this report is intended to provide market commentary and not as a recommendation or as a basis for investment decisions. The views expressed herein are the author’s and may differ from the views of others at Guardian International Gold. Guardian International Gold is a trader of Precious metals and this communication is to be considered an invitation to trade. Guardian International Gold makes our best effort to communicate reliable information but no express or implied warranty or representation as to its accuracy, completeness, or correctness may be taken.