Issue 30 – The week of September 5, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• OPEC meeting

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

• CAD Bank of Canada Monetary Policy Report. The Bank of Canada publishes a study of economic movements in Canada. It indicates a sign of a new fiscal policy. Any changes in this report tend to affect the CAD volatility. If the BoC report shows a hawkish outlook, that is seen as positive (or bullish) for the CAD, while a dovish outlook is seen as negative (or bearish).
• CAD Bank of Canada Interest Rate Decision. BoC Interest Rate Decision is announced by the Bank of Canada. If the BoC is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the CAD. Likewise, if the BoC has a dovish view on the Canadian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish

Thursday

• No reports of note

Friday

• CAD Net Change in Employment. The employment Change released by Statistics Canada is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive, or bullish for the CAD, while a low reading is seen as negative or bearish.
• CAD Unemployment Rate. The Unemployment Rate released by Statistics Canada is the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labour market. As a result, a rise leads to a weakening of the Canadian economy. Normally, a decrease in the figure is seen as positive (or bullish) for the CAD, while an increase 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 also market sentiment towards a certain asset.

Geopolitics

Summer markets have finished. Kids are back in school and trading rooms return to full staff and markets are returning to full liquidity.

China is in the midst of locking down millions of people for a handful of Covid cases as they attempt to pursue the policy of zero Covid. This continues to further exacerbate their economic woes and global supply chain disruptions.

Global economies continue to report that inflationary pressures are still rising higher as central bank rate hikes have not begun to have a significant impact as of yet.

The English economy is about to be decimated by massive energy bill increases with customers facing up to 500% higher bills than before the pandemic hit. Thousands of small businesses will shutter their doors as running their shops will not be viable. The British pound is at its lowest level versus the US dollar since 1985.

The Call

The precious metals prices in Canadian dollar terms could see moments of volatility this week a Bank of Canada interest rate decision and the release of monthly employment figures. As well announcements from the OPEC meeting could affect precious metals prices. Given the Fed’s hawkish tone market sentiment is moving closer to expectations of a 75 basis point hike from their meeting later this month putting more downward pressure on metals prices. Price dips should still be construed as buying opportunities.

Last Week in Review

• Precious metals staged a late-week rally after severe pressure early in n the week but still were unable to regain earlier losses
• Russia suspended gas deliveries to Europe for “routine maintenance”, the second time this summer then announced Nord Stream 1 line will be turned off indefinitely
• China locks down millions of people in a variety of separate regions as part of the zero Covid policy
• Crude oil prices fell recession fears affecting the global economy

	Gold	Silver
Open	1734	18.71
High	1745	18.90
Low	1688	17.54
Close	1707	17.93