Issue 16 – The week of May 30th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• CAD Current Account. Measures the net flow of transactions in and out of Canada, including goods, services and interest payments. A high reading is seen as bullish for the CA$ while a low reading is bearish.

Tuesday

• CAD Gross Domestic Product. A measure of the total value of all goods and services produced in Canada. A falling reading is bearish for the CA$ and bullish for precious metals.
• USA Consumer Confidence. A high reading is bullish for the US$ and bearish for precious metals.

Wednesday

• CAD Bank of Canada interest rate decision. The central bank will if interest rates will be hiked or left unchanged.
• USA Weekly crude oil stocks. A measure of inflation pressures and supply disruptions. A low reading is bullish for precious metals.

Thursday

• Vienna OPEC meeting. Topics to be discussed will be global high prices, production levels and supply disruptions.
• USA ADP employment change. Measures the strength of the US job market and economy in general.
• USA natural gas storage change. Drawdowns, a sign of further inflationary pressures, will be bullish for precious metals prices.

Friday

• USA Unemployment rate. Measures the number of people not working. The higher the number the worse the economy is perceived to be.
• USA Non-Farm Payrolls. Measures the number of new jobs created in the past month. The higher the number the more pressure on precious metals as the stock market is the main beneficiary of an increased workforce.

Geopolitics

An ever-growing list of countries that are either banning or curtailing exports of foods they produce adds to further global inflationary pressures. These pressures are mounting faster than central banks can reply. Commodity prices in general are quite high as anyone who has been to a gas pump recently will have noticed.

Supply chain disruptions remain with no sign of abating. China remains under lockdown for the most part. The war in Ukraine is seeing some very serious fighting in the Donbas region of eastern Ukraine. Cargo ships continue to be stacked up waiting to load or unload at ports around the world but specifically Pacific coast ports.

In the long run, as there is a flight to quality ie people buying US dollars the price of precious metals in most local currencies is going up as inflationary pressures affect local prices of goods. Economies will slow down as income doesn’t keep up with inflation and most people’s disposable income becomes heavily reduced.

The second half of the year is going to be very interesting indeed. As the old Chinese proverb that Is really a curse goes. May you live in interesting times.

The Call

The initial expectation would be for more the same of quiet precious metals markets, however. There are possibilities for some fireworks this week with Canadian and US employment reports due out this week. As well the OPEC meeting in Vienna could drive prices for precious metals and energies one way or the other depending on what kind of statement they make. Markets should be quiet until these events transpire later in the week.

Last Week in Review

• Volodoymyr Zelensky makes an address to political and business leaders at the Davos World Economic Forum in Davos, Switzerland
• India announced sugar exports to be capped at 10 million tonnes this year
• Indian wheat harvest is expected to be significantly reduced due to heatwave across the nation
• Precious metals made meagre gains but still reclaimed some more ground to the upside

	Gold	Silver
Open	1846	21.84
High	1869	22.46
Low	1841	21.68
Close	1854	22.13