Stylized representation of the movement of the price of gold.

Guardian Weekly Market Report – Issue 110

Site icon for Guardian Gold     Issue 110 – The Week of March 25, 2024

Key Resistance and Supports this Week

SupportResistance
2147.402200.00
2116.202225.00
2059.502250.00
2022.302312.00
SupportResistance
24.3225.50
23.8025.90
23.5026.25
22.3226.50

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Reports of Note Due This Week

In a shortened trading week, traders will get new inflation data, updates on consumer sentiment and housing market data. Markets are closed on Friday for the Good Friday holiday and there will be keen interest in a slew of economic indicators including the PCE Index.

  • Monday, March 25 at 10:00, we see New Home Sales for February which are expected to see a small increase to 675,000 from 661,000 last month.
  • Tuesday March 26 at 8:30 AM, we get Durable-Goods Orders for February. At 9:00 A.M, the S&P Case-Shiller Home Price Index from January is expected to show an increase to 1% from -6.2%. and Consumer Confidence comes out at 10:00 A.M.. 
  • Wednesday March 27, there are none scheduled.
  • Thursday March 28 sees the Weekly Initial Jobless Claims at 8:30 AM. They are expected to increase marginally to 214,000 from last weeks 210,000. We will also see the release of the GDP (2nd revision). Then at 9:45 A.M. the Chicago Business Barometer for March is released and at 10:00 A.M. Consumer Sentiment for March comes out and is expected to be unchanged at 76.5.
  • Friday March 28, markets are closed for Good Friday, yet a slew of economic reports are due out including Advanced U.S. Trade Balance in Goods, Advances Retail Sales and Advanced Wholesale Inventories, Personal Income as well as the Personal Consumption Expenditures (PCE) Index. The PCE is the Fed’s preferred measurement of inflation.

Geopolitics

A terrorist attack at Moscow’s Crocus City Hall, claimed by ISIS, resulted in at least 137 deaths. The attack, carried out by camouflaged men armed with guns, knives, and bombs, raises concerns about President Vladimir Putin’s leadership and Russian security forces. Putin’s delayed response and attempt to link the attack to Ukraine have been criticized. Security lapses allowing the attack have been condemned as a failure of Russia’s police state. The attack may be used as a pretext for Putin to bolster his war in Ukraine, potentially leading to increased mobilization and military action. The incident highlights ongoing security challenges in Russia and the region.

Almost half of Haiti’s population is facing severe food insecurity, with eight areas assessed to be in an emergency phase, nearing famine. Rising hunger, fueled by inflation, poor harvests, and gang violence, is worsening the security crisis. The World Food Programme and the Integrated Food Security Phase Classification highlight the urgent need for action. Gangs have expanded violence from Port-au-Prince to rural areas, affecting food production and distribution. Prime Minister Ariel Henry’s promise to resign once a transitional council is formed has been complicated by his current inability to return to Haiti. The situation is dire, with people resorting to desperate measures amid widespread violence and food shortages.

Israeli Prime Minister Benjamin Netanyahu plans to launch an offensive in the southern Gaza city of Rafah, despite warnings from U.S. President Joe Biden against such a move. Netanyahu expressed the need to enter Rafah to eliminate the military capabilities of Hamas and ensure Gaza no longer poses a threat to Israel. The conflict in Gaza has led to significant casualties and displacement of Palestinians, with a severe humanitarian crisis unfolding. Biden has urged Netanyahu to send a senior team to Washington to discuss alternatives to a ground offensive in Rafah, emphasizing the need to avoid further civilian casualties and worsened humanitarian conditions.

The Bank of Japan (BOJ) raised its short-term interest rates from -0.1% to around 0% to 0.1%, ending the world’s last negative rates regime. This move came in response to robust wage gains in Japan. The BOJ also abolished its radical yield curve control policy for 10-year Japanese government bonds, aiming to target longer-term interest rates through bond transactions. Additionally, the BOJ announced plans to stop purchases of exchange-traded funds and Japan real estate investment trusts (J-REITS) and gradually reduce purchases of corporate bonds over the next year. However, the BOJ will continue its purchases of Japanese government bonds at a similar rate as before. This change marks a significant shift in the BOJ’s decades-old policy of asset purchases and quantitative easing.

The Call

Gold made a new all time high last Wednesday after the FOMC meeting and press conference but was unable to hold onto those new levels. The U.S. Dollar firmed up Thursday and Friday while gold gave back almost all its gains. With a shortened week with the holiday on Friday, we expect gold to range trade between 2120.00 and 2220.00. Silver had a nice rally towards 26.00 but also gave all of it back closing at 24.68. We expect a quiet week with silver trading between 24.00 and 25.00.


Last Week in Review

On Wednesday, the Federal Reserve announced that it would leave it’s Fed Funds rate unchanged and also signaled that the year end rate would be 4.6%, unchanged from December. Gold had opened at 2158.10 and dipped to make the weekly low at 2147.4. We then traded sideways awaiting the Fed’s announcement on Wednesday afternoon. Traders loved what Jerome Powell said and gold rallied to make another all time high at 2223.40 by Wednesday evening. However, gold’s lofty new highs did not hold and gold headed back down on Thursday and Friday to finish the week roughly where it started and closed at 2164.80..

Silver opened at 25.25 on Sunday evening and traded sideways to lower until the FOMC announcement and press conference and then rallied strongly to make the weekly high at 25.83 Wednesday evening. What followed was not what silver traders wanted, a selloff to a low of 24.43 on Friday and eventual close at 24.68 in the afternoon.

  • The U.S. Dollar Index finished higher on the week at 104.43.
  • The Gold/Silver Ratio weakened for the week at 87.9 ounces of silver for 1 ounce of gold.

Last Week’s Price Ranges

MarketGoldSilver
Open2158.1025.25
High2223.4025.83
Low2147.4024.43
Close2164.8024.68

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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