Issue 55 – The week of March 6, 2023

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

The week is going to be thick with reports this week so expect some volatile moments.

The real action begins on Tuesday Fed Chairman Powell’s testimony before the Joint Economic Committee. This a two-part testimony with the first being a prepared statement. This is then followed by a Q&A session the next day. This second part can drive market volatility as it is unknown what path will be taken.

Wednesday sees the US release of the ADP employment figures as a precursor to Friday’s Non-Farm Payrolls reports. Expectations are for a rise of 195K to be added. Any number higher than this will weigh down on precious metals prices as the Fed will be concerned about inflationary pressures. The Bank of Canada’s interest rate decision will be announced. No change in rate policy is expected to be initiated at this meeting. The last release for Wednesday is the Fed beige book which looks at economic activity across the US. A positive report will be bearish precious metals.

Thursday will be relatively quiet with only a speech from Bank of Canada senior deputy governor Rogers speaking. Again depending on what language is used will determine how volatile the market reaction will be.

Friday is going to be a big day. It’s going to be one of those rare moments where both Canada and the US release their monthly employment reports at the same time. Without a doubt, it will be a remarkably volatile moment. A good moment to move to the sidelines and not a historic tradeable moment.

Geopolitics

China is setting lower growth goals after the economy there has taken a beating from years of the zero Covid policy effects on manufacturing and productivity. President Xi appears to understand the position he now finds himself in and just how precarious it is.

Can he hold it all together? Only time will tell.

The Russians continue to skirt European and US sanctions by making purchases from other state players using gold. For them, this is very easy as they are a top producer of gold and they have massive supplies.

It is also relatively easy to transport given its density. China will only be too happy to sell ammunition and weapons to the Russians. The Iranians will happily sell oil to the Russians as well. The war in Ukraine is far from over and the Russians have deeper pockets, in more ways than the Ukrainians do. Even if the
fighting stopped today supply chain disruptions from that part of the world will need years to be restored to their previous levels.

The Call

With the return of bullish sentiment to the markets last week precious metals prices have some wind in their sails once again.

As long as there aren’t too many many surprises this week metals are poised to make improvements on last week’s price gains.

Last Week in Review

Precious metals prices reversed their previous losses as bullish sentiment returned to trading
floors.

Central banks continued buying gold in January purchasing 31 tonnes a month-on-month
increase of 16% according to the World Gold Council.

	Gold	Silver
Open	1811	20.76
High	1856	21.26
Low	1804	20.44
Close	1852	21.17