Issue 26 – The week of August 8th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• No reports of note

Tuesday

• USA Weekly Crude Oil Stocks. API’s Weekly Statistical Bulletin (WSB) has reported total U.S. and regional data relating to refinery operations and the production of the four major petroleum products: motor gasoline, kerosene jet fuel, distillate (by sulphur content), and residual fuel oil. These products represent more than 85% of the total petroleum industry.

Wednesday

• USA Consumer Price Index. The Consumer Price Index released by the US Bureau of Labor Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of the USD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish

Thursday

• USA Producer Price Index. The Producer Price Index released by the Bureau of Labor Statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. A high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).

Friday

• USA Michigan Consumer Confidence. a survey of personal consumer confidence in economic activity. It shows a picture of whether consumers are willing to spend money. A high reading anticipates positive (or bullish) for the USD, while a low reading is seen as negative (or bearish).
• USA CFTC Net Gold Positions. The weekly Commitments of Traders (COT) report provides information on the size and the direction of the positions taken, across all maturities, with participants primarily based in Chicago and New York futures markets. Forex trades focus on “non-commercial” or speculative positions, to determine whether a trend remains healthy or not, and market sentiment towards a certain asset.

Geopolitics

Markets continue to be light in summer doldrum trading and are susceptible to exaggerated movements. As the war in Ukraine rages on there are growing concerns about the sabre rattling between China and the USA after House Speaker Pelosi visited Taiwan. Chinese military exercises have ramped up significantly around the island. Not just on the Taiwan Strait side but also just off the east coast as well. Further military exercises by China in the Yellow and Bohai Seas are expected to be conducted this week as well.

Energy prices have started to come off from highs earlier in the summer, however, this could be a temporary moment as summer will soon turn to fall for northern countries. This winter will be a real test of the resolve of European countries to stand with Ukraine, especially if it is a cold one. On the other hand, Russia might just tell the west you’ve made your bed now lie in it.

Inflation concerns and supply chain disruptions continue to weigh on global markets elevating costs across the world. The Bank of England released a report stating they see no fall in inflation until 2023.

The Call

It will be a light week for financial reports with only CPI and PPI of significant note from the US and no reports at all from Canada. Precious metals will be taking their queues from the currencies and geopolitical happenstances. After three weeks of advances, gold looks like it might take a shot at poking back above 1800. Silver hovering just below the 20.00 handle will almost certainly climb back above that figure. The real question is does it have enough in the gas tank to close above there by the end of the week?

Last Week in Review

• Precious metals were mixed last week with gold rallying and silver taking a loss on the week
• First grain ship from Ukraine clears inspection in Turkey and cleared to proceed to Lebanon
• Bank of England raised interest rates by 50 basis points to 1.75%, the highest rate since 2008
• Canada lost 30,600 jobs but the unemployment rate remained unchanged at 4.9%
• The US gained 528,000 new jobs and registered an unemployment rate of 3.5% beating market expectations for both.
• The UK announced they suspect inflation could climb as high as 15% by the beginning of 2023

	Gold	Silver
Open	1762	20.19
High	1794	20.50
Low	1754	19.53
Close	1774	19.87