Issue 19 – The week of June 20th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• No reports of note due out

Tuesday

• CAD New House Price Index. Measures the change in the selling price of new homes. A high reading is CAD Retail Sales. A measure of consumer confidence. A positive report anticipates future bullish economic development.
• USA Existing Home Sales. A high reading is bullish for the US dollar and economy and low reading is bearish.

Wednesday

• CAD Consumer Price Index. A measure of inflation in the retail economy. The higher the reading the more likely a central bank rate hike will happen.
• USA API Weekly Crude Oil Stocks. Currently measures inflationary pressure as well as supply chain disruptions.
• CAD Bank of Canada Deputy Governor speech. Her comments on the policy outlook, economy and inflation could impact the Canadian dollar’s performance against its major rivals.

Thursday

• USA EIA Natural Gas Storage Levels. Currently measures inflationary pressure as well as supply chain disruptions.

Friday

• USA Michigan Consumer Confidence. a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money. Generally speaking, a high reading anticipates positive (or bullish) for the USD, while a low reading is seen as negative (or bearish).
• USA CFTC Net Gold Futures Positions. A tally of all futures positions for all delivery dates. Shows market sentiment going into the future.

Geopolitics

The question on traders’ minds now is when it comes time for central banks to make interest rate policy decisions, no longer will they hike rates, but how much will they hike them by. The exception to this is the Bank of Japan which last week chose to leave rates unchanged while continuing to leave in place their stimulus package policy. Japan has since the 7th century had a different view on debt than the rest of the world. When debt becomes a burden to the sovereign debt is simply dissolved. This term is called tokusei in Japan. A great policy if you’re holding debt but not so good if you issued debt. Today in the rest of the world central banks are desperate to avoid falling into stagflation, where inflation goes up but wages remain unchanged.

The effects of the war in Ukraine are reaching further each day into the global economic chain and will continue to do so for the many months to come. Shipping remains backed up at ports everywhere. Concerns about food shortages in non-producing nations such as Egypt are becoming increasingly real.

A global push to develop renewable energy sources will be very bullish for silver as it is a key component of solar panels and batteries and components in electric cars. With more manufacturers entering the market all the time conditions are ripe for establishing or adding to silver holdings.

The Call

Precious metals markets have digested last week’s FED rate hike of 75 basis points and have made a decent recovery. It will take some time and a few more hikes by global central banks before inflation starts to get reigned in. Considering that precious metals held their own last week there is still some decent upside potential for precious metals this week.

Last Week in Review

• US Federal Reserve hikes interest rates by 75 basis points, the biggest rate hike since 1994
• Bank of Japan leaves interest rates unchanged and continues its stimulus policy
• After several weeks of gains, gold slipped last week and silver continued to be off ever so slightly for the third week in a row

	Gold	Silver
Open	1875	22.01
High	1879	22.04
Low	1805	20.91
Close	1840	21.68