Issue 42 – The week of November 28th, 2022

Key Resistance and Supports: Upcoming Week

Reports of Note:

Monday

• US Gross Domestic Product (GDP). As the US economic activity continues to expand look for US dollar strength at the expense of precious metals. Any slip in metals prices should be viewed as a buying opportunity
• US CFTC net Gold futures positions. Report from last week after the US Thanksgiving holiday. Gives insight into market sentiment. The report doesn’t have a direct effect on the price of gold but can be considered a current indicator of direction.

Tuesday

• US Consumer Confidence. With the Fed signals that they feel inflationary pressures are being reeled in and future interest rate hikes will be tapered look for a boost to precious metals prices.
• US Weekly Crude Oil Stocks. Look for a slight drawdown in stocks as winter temperatures arrive in the US and furnaces are turned on. Precious metals prices should have a rise on this data.

Wednesday

• CAD Gross Domestic Product (GDP). As Canadian economic activity continues to expand look for Canadian dollar strength at the expense of precious metals. Any slip in metals prices should be viewed as a buying opportunity
• US ADP employment report. A strong indicator of employment payrolls. Holiday hirings will probably give a rise to this report being detrimental to precious metals prices.

Thursday

• US Manufacturing Purchasing Managers Index (PMI). Look for a strong reading on this report that will benefit the US dollar while weakening precious metals.

Friday

• US Non-Farm Payrolls. One of the most followed indicators is unfortunately subject to massive revaluations each month. The report can drive extreme fluctuations in prices quickly.  Market volatility with this report makes it too difficult to call what will happen.
• CAD Unemployment report. Almost as equally volatile as the US report and coming out at the same moment in time. The combined chaos makes calling where precious metals prices will go a purely speculative endeavour.
• US CFTC net Gold futures positions. Gives insight into market sentiment. The report doesn’t have a direct effect on the price of gold but can be considered a current indicator of direction.

Geopolitics

Global economic stresses continue to grow as lockdown protests in China are spreading like wildfire. It’s not just residents of cities protesting their discontent but workers at companies such as Foxconn, which manufactures iPhones, have been not only locked down but have not received their wages for over a month. Xi Jinping’s domestic troubles continue to escalate with the younger demographic of Chinese society. The last time this happened in China was at Tiananmen Square. They need to get the economy back up and running to alleviate supply chain disruptions and restore faith in their ability to fulfill their manufacturing obligations.

Globally mining rights are being seen as a national security issue. As the geopolitical geography shifts, countries such as Canada are revoking the abilities of foreign-based corporations to operate within their national borders. We are well into a new Cold War which the current front line is economic trench warfare. Trading partners and alliances are in a state of flux. One of the key tools on all sides is misinformation. Going forward learning how to decipher fact from fiction is becoming a more important skill with each passing day, especially when it comes to making investment decisions. That’s why gold remains timeless and should become a part of your portfolio if it isn’t already.

The Call

Look for the market activity to continue to be muted and move mostly sideways with a slight upward bias. Between the World Cup and the end-of-year closing of trades to square up books, there probably won’t be a lot of market action in either direction during December. For the moment silver continues to lead the price direction for the precious metals markets.

Our end-of-year recap will be out soon then shortly after followed by our outlook for precious metals prices in 2023.

Last Week in Review

• Precious metals had a quiet week with the confidence of the US Thanksgiving and the start of the World Cup in Qatar. Gold ticked down on the week but remained essentially unchanged while silver managed a modest gain.

	Gold	Silver
Open	1752	20.99
High	1760	21.66
Low	1728	20.56
Close	1750	21.26