Guardian Weekly Market Report
Issue 15 – The week of May 22nd, 2022
Key Resistance and Supports: Upcoming Week
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Reports of Note due out this week:
- World Economic Forum in Davos, Switzerland. An optimistic outlook is considered to be bullish for markets and a pessimistic view is to be bearish. Runs through to May 26th.
- USA Chicago Fed National Activity Index. A monthly index designed to gauge overall economic activity and related inflationary pressures.
- API weekly crude oil stocks. A fall in stocks indicates both inflationary pressures and continued supply chain slowdowns.
- USA Durable Goods orders. A measure of large ticket items expected to last for three years or longer. A high reading is seen to be bullish for the US$ at the expense of precious metals.
- USA FOMC release of minutes from the most recent meeting. Details of driving factors on most recent Fed activity.
- CAD Retail Sales. The monthly tally of sales with a high reading shows good economic activity which tends to be bullish for the CA$ and bearish for precious metals.
- USA GDP. The monetary value of goods, services and structures produced in a given set of time. A reading that is better than expected is bullish for the US$ while a weaker than expected one is bearish.
- USA Wholesale inventories. A low inventory reading is perceived to be a sign of a strong economy and bullish for the US$. A high reading is seen as a sign of a slowing economy and bearish for the US$.
- USA CFTC net gold futures positions. A weekly tally of all futures contracts indicating the markets’ view of the future price direction of gold.
The Chinese continue to lock down more and more of the country in a vain attempt to contain Covid from spreading. The latest town facing lockdown is Tianjin. The important thing about Tianjin is that it’s the northernmost port in China and is a city of 12 million people. The port is vitally important for delivering supplies to the region’s heavy industries and textile factories. A lockdown here will only put further strains on an already stressed supply chain network. Currently, Shanghai has over 100 ships waiting to dock. Hong Kong and Shenzhen have 200 and there is a waiting time of three weeks to dock in Vancouver.
Global crop disruptions and shortages also are compounding with various producing nations declaring bans on exporting crop products. Instead, they will be kept for domestic consumption. Not so bad if you’re a producing nation, but if you’re say Egypt the equation changes as they import 94% of their grains.
Prices for everything are going up everywhere. This isn’t going to change anytime soon. Time to tighten your belts because the inflation boogeyman is going to be here for a while. His cousin stagflation will probably pay a visit to some economies at we’ll.
Precious metals look set to continue their upward price movements again this week. Fundamental factors such as the war in Ukraine, supply chain disruptions and volatile equity markets continue to give precious metals a positive impetus.
Last Week in Review
- Russia cuts off the natural gas supply to Finland
- The incumbent government was voted out of office in Australia
- Shanghai reopens some public transportation after two months of Covid lockdown
- Turkey says it is not in favour of Finland and Sweden joining NATO
- Precious metals prices had a positive closing price for the first time after three weeks of losses
- The USA is forced to import approximately 36,000 kgs of baby formula from Europe due to domestic production shortages