Stylized representation of the movement of the price of gold.

Guardian Weekly Market Report – Issue 116

Site icon for Guardian Gold     Issue 116 – The Week of May 6, 2024

Key Resistance and Supports this Week

SupportResistance
2277.002328.00
2238.002368.00
2190.002405.00
2160.002490.00
SupportResistance
25.7426.76
24.8927.50
24.2028.40
23.5329.65

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Reports of Note Due This Week

The Federal Reserve’s officials will take the opportunity this week to express their views on the economy. We will also receive an update on consumer sentiment on Friday. Generally, a quiet week for major economic reports.

  • Monday, May 6 – None scheduled.
  • Tuesday May 7 – Late in the trading day we will receive an updated report on consumer credit at 3:00 PM.
  • Wednesday May 8 – at 10:00 A.M. wholesale inventories for March. April.
  • Thursday May 9 – sees the Weekly Initial Jobless Claims at 8:30 AM. They are expected to come in at 212,000 up from last weeks 208,000.
  • Friday May 10 – At 10:00 A.M., we see the release of consumer sentiment (Prelim) May.

Geopolitics

The ceasefire talks between Israel and Hamas in Cairo have made little progress, with both sides refusing to compromise on key demands. Hamas plans to consult with its leadership in Qatar. The discussions involve a 40-day ceasefire proposal, the release of hostages by Hamas, and the release of Palestinian prisoners by Israel. However, a major contention is whether any ceasefire agreement would lead to a permanent end to hostilities. Israel’s Prime Minister, Benjamin Netanyahu, has explicitly rejected the idea of a temporary ceasefire leading to Hamas regaining control in Gaza, which he described as unacceptable and a defeat for Israel. Talks are expected to continue despite these challenges.

Spanish Prime Minister Pedro Sánchez announced he will continue in his role with renewed determination after a period of contemplation regarding his political future. This decision follows a turbulent week sparked by a court’s preliminary investigation into corruption allegations against his wife, Begoña Gómez. The allegations, presented by the far-right group Manos Limpias and based on newspaper articles, were deemed by prosecutors as lacking sufficient grounds for continuation. Despite this, the ordeal led Sánchez to consider his priorities deeply, given the personal nature of the attacks on his family. Amidst accusations from opposition parties of using the situation for political gain, Sánchez’s supporters argue that this incident highlights the need to combat unfounded political smears in Spain.

The United States has accused Russia of violating the international ban on chemical weapons by using chloropicrin, a prohibited choking agent, against Ukrainian forces. This action is seen as part of Russia’s broader strategy to gain tactical advantages on the battlefield. The State Department highlighted that this is not an isolated incident and aligns with Russia’s previous use of banned substances, referencing the poisoning of Alexei Navalny and the Skripals with Novichok. Additionally, the U.S. has sanctioned nearly 200 entities, including imposing significant measures against Chinese companies for their support of Russia’s military efforts, amid ongoing tensions and the complex geopolitical interplay involving China’s trade relations and compliance with international sanctions.

In southern China, a section of a highway collapsed after heavy rains, causing at least 36 deaths and injuring 30 others. The incident occurred early Wednesday when a 58.7-foot section of the highway gave way in Meizhou city. Rescue efforts were hindered by ongoing rain and debris at the site. The area has experienced over 22 inches of rain in four weeks, significantly more than the previous year, leading to widespread flooding and additional challenges like landslides, which are particularly dangerous in mountainous regions. This tragedy highlights concerns regarding the rapid infrastructure expansion in China, where design and construction flaws, alongside inadequate maintenance, have previously led to fatal accidents.

The Call

Gold continued to trend lower this week getting closer to our short-term target of 2200.00 to 2225.00 which we expect over the next couple of weeks. The U.S. Dollar has been weakening a little which is usually favorable to gold rallying. Bitcoin was trending lower but has quickly changed direction rallying from 57000 level up to 64000 since last Wednesday. Both are suggesting a rally in gold is close at hand. We are still calling for gold to drop towards 2200 and with a very quiet week on the economic front, we see little to slow this decline.


Last Week in Review

Gold opened near its weekly high again at 2338.40 Sunday evening and bounced a bit to set the high at 2349.50 shortly afterwards. Then the usual selling of late resumed and the selloff had gold down to 2283.00 by Tuesday at midnight before a rally took gold back to  2330.00 after the FOMC meeting. Another dip took gold down to a new weekly low Friday morning of 2275.90. Gold then bounced to close Friday afternoon at 2300.90.

Silver opened at 27.05 on Sunday evening and bounced a few cents making its weekly high at 27.21 before selling down to its weekly low on Thursday at 25.765. Silver then drifted higher to close at 26.305 on Friday afternoon.

  • The U.S. Dollar Index finished a weaker for the week at 105.03.
  • The Gold/Silver Ratio weakened a little this week to settle at 86.8 ounces of silver for 1 ounce of gold.

Last Week’s Price Ranges

MarketGoldSilver
Open2338.4027.05
High2349.5027.21
Low2275.9025.75
Close2300.9026.30

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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