Guardian Weekly Market Report
Issue 5 – The week of March 14th, 2022
Key Resistance and Supports : Upcoming Week
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Reports of Note due out this week:
- CAD housing starts. The report will be an indicator of inflation and could affect the USDCAD rate which can change the price of gold in CAD terms
- USD producer price index. An increase will show inflation continues to rise which would be bullish for overall gold prices
- USD weekly crude stocks. Stock drawdowns will be bullish for oil and gold as well as implying further upward inflation pressures
- CAD consumer price index. Rises in this index will show inflation rising still and be bullish for gold in CAD pricing
- USD retail sales. A drop in this number will be indicative that households are feeling the effects of rising inflation and are less inclined to spend any disposable income available.
- USD Federal Reserve interest rate decision. Markets are fully expecting an interest rate rise this week. The only question is how big it will be.
- CAD ADP employment report. A private monthly payroll report indicating the general health of the economy.
- USD CFTC net change of gold futures contracts
All eyes will be on the Federal Reserve this week awaiting what their decision will be on interest rates. This will be the Fed’s opening salvo on interest rates and given how high inflation rates are, questions abound as to how hawkish or dovish their action will be. The Fed will now begin their war on inflation in earnest, after remaining on the sidelines as long as they have. At the very least there will be a 0.25% hike and possibly a 0.50% hike. Gold will react negatively to both of these possibilities, more so to a half-point rate hike. You can expect the afternoon session of New York gold trading to be very dynamic at a minimum.
Supply chain strains continue to be exacerbated by the war in Ukraine, the continuing deteriorating economic relations between Russia and its former trading partners. Rising energy prices weigh on shipping backlogs as shipping costs are directly affected by fuel expenses. Many shipping companies now run their ships at reduced speed making for longer journeys.
Long established market norms are quickly morphing into new relationships and it seems as if previously built bridges are being forsaken. This is very much still evolving with consequences that will reach far into the future.
Last Week in Review
- Precious metals went on a wild roller coaster ride finishing off very close to where they started the week.
- The global nickel trading market took center stage last week as concerns about position exposure of several Chinese banks caused prices to go – what can only be described as – parabolic. This resulted in a global cessation of trading in nickel.
- Russian forces continue to push further into Ukraine and now sit in the suburbs of Kyiv.