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Issue 107 – The week of March 4th, 2024

Key Resistance and Supports: Upcoming Week

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SupportResistance
2037.002100.00
2015.302137.50
1991.202166.20
1965.702187.50
Gold
SupportResistance
22.7223.56
22.2824.25
22.0024.92
21.1225.46
Silver

Reports of Note due out this week:

U.S. financial markets will have a lot of information to digest this week with Federal Chair Jerome Powell delivering testimony to Congress on Wednesday and Thursday, the State of the Union address on Thursday and the February employment report on Friday to name a few.

  • Monday, there are no economic reports scheduled.
  • Tuesday at 10:00 AM we see the release of Factory orders (Jan) and ISM services PMI for February.
  • On Wednesday at 8:15, we start with the ADP employment report followed by U.S. wholesale inventories (Jan), Job openings and Federal Reserve Chair Jerome Powell testifying to Congress at 10:00 AM.
  • Thursday morning sees the weekly Initial Jobless claims at 8:30 AM. They are expected to rise to 218,000 from last weeks 215,000. Also, at 8:30 we see the release of U.S. productivity revision and U.S. trade balance for January. Fed Chair Jerome Powell testifies to Senate Banking Committee.
  • Friday at 8:30 AM, we will see the release of the February U.S. nonfarm payrolls which are projected to fall to 210,000 new jobs from the previous months 353,000. We also see the U.S. unemployment rate (3.7%) and hourly wages.

Geopolitics

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. 

The Call

Gold broke out to the upside last week and rallied strongly on comments from Fed Governor Christopher Waller on Friday morning. Can this rally continue! We think there are targets close to where we are trading which can be achieved. First target on gold would be 2125.00 and with a break of this level an attempt to hit 2187.00 There are numerous economic indicators this week along with President Biden’s  State of the Union address and Fed Chair Jerome Powell testifying before Congress and the Senate Banking Committee which will keep all of us on pins and needles hoping for higher prices.

Last Week in Review

Gold opened Sunday evening at 2035.40 spot and then traded in a narrow range between 2024.00 and 2040.00 until the Thursday morning release of the PCE release at 8:30 AM which proved to be hotter than expected. Gold then rallied to the 2050.00 handle and then drifted mildly lower into the close. Then on Friday morning, Fed Governor Christopher Waller spoke at the U.S. Monetary Policy Forum in New York and hintedat a new form of Quantitative Easing (reverse twist) for its balance -sheet…… and the gold price accelerated higher to make a new all time closing price of 2082.80!

Silver opened at 22.975 on Sunday evening and drifted lower to make the weekly low of 22.26 Wednesday morning. Silver also followed golds movements after the Thursday morning release of the PCE at 8:30 AM which proved to be much hotter than expected and the Thursday-Friday rally took silver up to 23.28 an ounce before settling at 23.14 in the afternoon.  

  • The U.S. Dollar Index finished a little weaker on the week at 103.86.
  • The Gold/Silver Ratio closed a weaker for the week at 90.2 ounces of silver for 1 ounce of gold.
GoldSilver
Open2035.4022.97
High2088.4023.28
Low2024.6022.26
Close2082.8023.14
Last Week’s Gold and Silver Ranges

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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.

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