Issue 50 – The week of January 30th, 2023

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

There are a swath of reports coming out this week, each of which will have the potential to move precious metals prices.

The first will be the only Canadian report of note this week on Tuesday: release of GDP figures. Look for a rise in year-on-year and monthly numbers to remain static. This should give a slight boost to the Canadian dollar which could become a buying moment for precious metals.

After that, the market will see some heavy-hitting reports released from Wednesday through Friday.

On Wednesday, the US Federal Reserve will announce its decision on interest rate policy. Markets are expecting a 25-basis point hike this week and look to already be pricing this in.

Thursday will see the Bank of England announce its interest rate decision. They are expected to raise rates by 50 basis points. This expectation is weighing on precious metals pricing already.

Friday will see the release of the US employment report for January. Speculation on this report is a mug’s game, yet the markets pay it much attention. It is such a suspect release because often the previous month’s report is revised by up to 50% either up or down. It is a good moment to step to the sidelines and watch the carnage.

Geopolitics

There were big developments in the war in Ukraine over the past week. The Germans and the US came to an agreement where they would both send battle tanks to Ukraine. More importantly and much less talked about are the attacks in Iran on ammunition storage facilities and drone factories. These are the same drones that the Russians have been purchasing. So, who did it? Needless to say, there is speculation that the Israelis were behind it and no acknowledgment from them. Putin’s three-day war is now actively spilling into other countries. So, what does this mean for precious metals? Well, if your country shares a border with Russia and you are a central banker you might be thinking about moving gold reserves to somewhere like Switzerland, England or the US. These are perilous times we live in.

The Call

Precious metals prices will probably be under pressure this week. Gold should be able to hold itself above the $1900 handle. Silver on the other hand is looking quite weak. The volatility in silver prices over the past couple of weeks indicates that it is still a leading indicator for gold. If silver can turn back to the upside, gold will have the strong wind in the sails to make a run to $1950.

Last Week in Review

• Precious metals prices again were mixed with gold making the most meagre gains and silver slipping in a week of volatile price swings.
• Chinese gold production rose 13% in 2022.
• Switzerland announced they imported 28.5 tonnes of gold from Russia in 2022
• China says the current Covid wave is trending lower with fewer cases reported.

	Gold	Silver
Open	1927	24.00
High	1949	24.28
Low	1911	22.74
Close	1928	23.63