Issue 35 – The week of October 10th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• International Monetary Fund meeting. Member countries to discuss stabilizing exchange rates. Traders should pay attention to this event as it might bring a new dimension to the markets.

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. Stocks down are good for precious metals.
• US Redbook index. A private analysis of retail sales is used to help verify government retail sales reports. Strong sales are a sign the economy is healthy but could put upward pressure on inflation which is bullish for precious metals.
• International Monetary Fund meeting. Member countries to discuss stabilizing exchange rates. Traders should pay attention to this event as it might bring a new dimension to the markets.

Wednesday

• 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).
• International Monetary Fund meeting. Member countries to discuss bring stability to exchange rates. Traders should pay attention to this event as it might bring a new dimension to the markets.

Thursday

• 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
• International Monetary Fund meeting. Member countries to discuss stabilizing exchange rates. Traders should pay attention to this event as it might bring a new dimension to the markets.

Friday

• USA Retail Sales. The Retail Sales released by the US Census Bureau measures 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).
• 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 also market sentiment towards a certain asset.
• International Monetary Fund meeting. Member countries to discuss stabilizing exchange rates. Traders should pay attention to this event as it might bring a new dimension to the markets.

Geopolitics

The winds are shifting to the defender’s side in the Russian invasion of Ukraine with the development of significant Ukrainian advances. Within Russia, cracks are beginning to appear in the form of dissenting opinions within Putin’s cabinet. The Russian army is on its back foot and its prospects don’t look good.

Global economies are starting to stumble in the face of inflationary pressures which remain at 40-year highs. Employers continue to struggle to find new employees. The problem is that corporate profits are at 50-year highs, but wages remain stagnant. This creates an artificially higher level of inflation than would be.

The Call

The big potential market mover this week will be the IMF meeting which lasts all week. Given the strength of the US dollar and surging inflation rates, expect the IMF to address these issues. Until they make a statement, precious metals, like other investments, will play second fiddle to the US dollar. Again, look for lower price action unless gold can achieve a weekly close above 1700.

Last Week in Review

Precious metals had strong early gains but encountered some profit-taking for the week and were finally stopped by the stronger-than-expected US employment report

	Gold	Silver
Open	1664	19.09
High	1729	21.23
Low	1659	19.04
Close	1696	20.12