Issue 11 – The week of April 25th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• CAD Bank of Canada governor’s speech. The market will be looking for clues to interest rate policy. A tighter policy is bullish for the CAD $ and bearish for precious metals.
• USA CFTC net gold futures positions. Overall indicator of market sentiment to either bullish or bearish.

Tuesday

• CAD Bank of Canada deputy governor Lane speech. BOC gives many indications of upcoming interest rate policy direction.
• USA durable goods orders. A measure of the costs of orders for durable goods received by manufacturers. Another leading indicator of inflation pressures.
• USA consumer confidence. A measure of individual confidence in economic activity overall. High reading bullish USD and low reading bullish precious metals.
• USA API weekly crude oil stocks. Fall in stocks bullish precious metals as well as indicating inflationary pressures remain in play.

Thursday

• USA GDP. The monetary value of all goods, services and structures produced by a given country. A better-than-expected result is bullish for the US and a weaker than expected reading is bullish for precious metals.

Friday

• CAD GDP. The monetary value of all goods, services and structures produced by a given country. A better-than-expected result is bullish for the CAD$ and a weaker than expected reading is bullish for precious metals.
• USA Michigan Consumer Sentiment Index. A measure of consumer confidence in economic activity. High levels are bullish for the US and lower levels bullish for precious metals.
• USA CFTC net gold futures positions. Overall indicator of market sentiment to either bullish or bearish.

Geopolitics

Surging bond yields and interest rates are taking any wind out of precious metals sails. Central banks around the world have all announced there is a new economic boogie man and his name is inflation. Gold shed almost $20 an ounce in Asian trading to start the week off. The battle to rein in inflation is just beginning but tools are being deployed to stop it in its tracks. Many central banks have indicated the next round of interest rate hikes will be 50 basis points least. High inflationary pressures and rising interest rates will only drive up the prices for most consumables. Especially food and energy-based commodities.

Equity markets look like they will be taking it on the chin this week as they too feel the fallout from the central banks’ assault on inflation.

The Call

Precious metals will be under significant pressure this week with the concerted effort to bring pressure to bear against global inflation. 1900 will most likely be a significant line in the sand this week. Precious metals will feel more downward pressure if crude oil falls toward the $90 a barrel level. This week there is much more resistance higher than the support below. Could be a buying opportunity this week.

Last Week in Review

Precious metals tried to kick off the week on a good foot but quickly stumbled eventually falling flat on their faces. There was a fair amount of bearish news weighing on gold and silver prices. A new narrative is becoming the mantra of central banks, that being the war on inflation. Funds started to shift from commodity and equity markets into bonds and will probably continue to do so for some time to come.

The London Metals Exchange announced that it would be winding down its foray into being a futures exchange for gold and silver by the end of July this year.

	Gold	Silver
Open	1987	25.88
High	1998	26.24
Low	1926	24.06
Close	1932	24.19