Issue 40 – The week of November 14th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Monday

• 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.

Tuesday

• 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. PPI changes are an indicator of commodity inflation. A high reading is positive (or bullish) for the USD, whereas a low reading is negative (or bearish).
• 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 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 an indicator of consumer spending. A high reading is positive (or bullish) for the USD, while a low reading is negative (or bearish).
• 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 (of 1%-3%). A high reading is seen as anticipatory of a rate hike and is positive (or bullish) for the CAD.

Thursday

No reports of note

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. 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

China has started to ease off some of its draconian Covid policies but only in minor ways. Millions of people remain under lockdown and economic productivity remains severely reduced. It appears Xi Jinping is beginning to take notice of how much damage is being done to the economy and, more importantly, China’s reputation.

The situation in Ukraine is moving massively in the favour of the Ukrainians. Speculation last week that winter would create a stalemate situation has now changed in the face of near-mutinous conditions in the Russian military. The deal allowing grain shipments from Ukraine through the Black Sea remains in place, but its status is tenuous.

Global inflation is finally showing signs of abating, but economies are not out of the woods yet. Central banks will now have to fine-tune their interest-rate policies to reduce inflation without hindering new economic growth. It will assuredly be a tightrope walk for the next few months.

The population of Earth is projected to surpass 8 billion people on November 15. Given our increasing demand for electronic devices, precious metals demand will only accelerate going forward.

The Call

Lots happening in the world and precious metals markets have changed currents. From a technical perspective, markets have broken through significant resistance levels which now become strong support areas. Both gold and silver are poised to make further gains by year-end as signs inflationary pressures are beginning to ebb and investors move out of the US dollar. Canadian CPI release this week could further reinforce that sentiment. With confirmation that the Democrats have retained the Senate look for another push higher for precious metals this week. If they can take the House of Representatives look for an even higher push.

Last Week in Review

Precious metals had a strong showing last week following the US election results and weaker than expected CPI inflation report as well as a strong Michigan consumer sentiment report

	Gold	Silver
Open	1672	20.51
High	1772	22.05
Low	1664	20.37
Close	1763	21.58