Issue 27 – The week of August 15th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• No reports of note

Tuesday

• CAD Consumer Price Index. The Consumer Price Index (CPI) released by Statistics Canada 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 CAD is dragged down by inflation. The Bank of Canada aims at an inflation range (1%-3%). A high reading is seen as anticipatory of a rate hike and is positive (or bullish) for the CAD.
• 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. Stocks down good for precious metals.

Wednesday

• USA Retail Sales. The retail Sales released by the US Census Bureau measure the total receipts of retail stores. Monthly percent changes reflect the rate of changes in such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. A high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish).

Thursday

• CAD ADP Employment Change. The Employment Change released by Automatic Data Processing Inc is a measure of the change in the number of employed people in Canada. A rise in this indicator has positive implications for consumer spending, stimulating economic growth. So, a high reading is traditionally seen as positive, or bullish for the CAD, while a low reading is seen as negative, or bearish.

Friday

• CAD Retail Sales. The Retail Sales released by Statistics Canada is a monthly data that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. The retail sales index is often taken as an indicator of consumer confidence. It shows the performance of the retail sector in the short term. The positive economic growth anticipates bullish movements for the CAD.
• 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

The economic situation in the USA continues to improve slowly each week. Energy prices have been falling since reaching their highs in June. The employment rate is at multi-year lows. The monster in the closet inflation I finally starting to show signs of reduction. That’s the good news.

On the other side of the coin, the war in Ukraine continues at the same horrible pace since the February invasion. Very soon the weather will turn to fall and then winter, and the dynamic of fighting strategy will change. European countries are scrambling to secure energy supplies as Russia is slowly turning the taps off.

Supply chain disruptions remain a significant albatross on global markets. Each week the list of products going into shortage grows. This list will only get bigger and store shelves will have more bare space.

The sabre rattling between China and the USA has toned down with both sides having a sense of not losing face. But have no illusion we are just approaching the foothills of what will be a protracted Cold War for decades to come.

The Call

Look for precious metals prices to continue their measured upward movement this week.  Geopolitical events continue to create a bullish sentiment for precious metals markets. As energies slip haven choices like gold and silver will attract investors. With only two weeks of summer doldrum trading left risk on trades will not be encouraged. Any dips in precious metals prices should be viewed as a buying opportunity.

Last Week in Review

Both silver and gold had positive moves higher last week with gold achieving prices not seen since the beginning of July, getting back above the 1800 handle for a moment.

	Gold	Silver
Open	1774	19.81
High	1807	20.83
Low	1771	19.78
Close	1799	20.76