Issue 14 – The week of May 16th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• CAD Manufacturing Sales. Overall sales in Canada represent expected demand. A falling number is bearish for the C$ a rising number is bullish. Inverse for precious metals.
• CAD Wholesale Sales. Overall sales made by wholesalers. A falling number is bearish for the C$ a rising number is bullish for the C$. Inverse for precious metals.

Tuesday

• USA Retail Sales. Total monthly receipts from US retailers tracking consumer spending. A rising report is bullish for the US$ and a falling report is bearish for the US$.
• USA Industrial Production. The volume of production of US industries such as manufacturing and factories. A high number is seen as inflationary and could indicate further interest rate hikes and is bullish for the US$
• USA Capacity Utilization. The percentage of US production capacity used over a short period. A high reading is indicative of further inflationary pressures and bullish for the US$ and a low reading is bearish for the US$.
• USA Weekly Crude Oil Stocks. A measure of energy reserves primarily and of supply chain interruptions secondarily. Falls in stocks are bullish for precious metals prices inverse for a rise in stocks.

Wednesday

• CAD Consumer Price Index. A measure of price changes for a basket of goods and services. Generally, a high reading is seen to be inflationary which anticipates further interest rate hikes and is bullish for the C$.

Thursday

• CAD ADP Employment Change. The change in the number of people employed people in Canada. A rising number is seen as a strength in the economy and bullish for the C$.
• CAD Industrial Product Price. Price changes for major Canadian commodities. A rise is seen as bullish the C$ and a falling number is seen as bearish the C$.
• CAD Raw Material Price Index. Measure the prices paid for raw materials by Canadian manufacturers. It is seen as an early indicator of inflationary pressures. A rising number is bullish for the C$ and bearish on a falling number.

Friday

• USA CFTC net gold futures positions. A report showing market sentiment going into the future for the price of gold. If more long (buy) contracts market is bullish if more short (sell) contracts market is bearish.

Geopolitics

Chinese Covid zero lockdowns are easing ever so slightly today as hard evidence emerges of how hard the economy there has been affected by the policy. Chinese retail sales released today were much worse than the expected -6% coming in at -11%. In the same story, industrial production was expected to be +0.7% but had a reading of -2.9%. The Chinese government put these misses as a one-time event due to the tight lockdown policy of the past 8 weeks.

In another sign of supply chain problems and further commodity-related inflationary pressures India today announced that it was banning the export of wheat as a large-scale drought has devastated crops there. Another sure indicator food prices will be going up globally.

The war in Ukraine continues with fighting focused on the Eastern Donbas region. The sabre-rattling from Russia is becoming louder as Finland and Sweden announce their intentions to join NATO.

The Call

Precious metals prices remain under pressure going into this week having had a weak performance for the fourth week in a row. Tests below 1800 should be a near certainty. Closes below there will be a good sign of further sell-offs.

Last Week in Review

Once again price action for precious metals was a one-way street, down. As soon as the markets opened they slipped and slipped all week long. Silver especially is now poised in a very perilous technical area, having very little support below the current area.

	Gold	Silver
Open	1884	22.40
High	1886	22.40
Low	1799	20.47
Close	1812	21.55