Issue 6 – The week of March 21st, 2022

Key Resistance and Supports : Upcoming Week

Reports of Note due out this week:

Tuesday

• CAD industrial product price and raw material indexes. Indicator of inflation in the economy. A strong report will be bullish for precious metals if inflation continues to grow
• USD weekly API crude oil inventories. Drawdowns will be bullish for precious metals as supply chain issues continue to weigh on deliveries.

Thursday

• USD natural gas storage supplies. Another energy report similar to that of crude oil. A decrease in stocks implies supply chain problems and would be bullish for precious metals.

Friday

• CAD Bank of Canada deputy governor Gravelle presents speech. Look for indications of future BOC policy direction.
• CFTC net gold positions. Indicating market sentiment for the future price of gold. If the net buying market thinks price going up. If the net selling market thinks the price will fall.

Geopolitics

The war in Ukraine continues to reshape the economic world with traditional macro customer relationships shifting. There will be long-term consequences that have not begun to manifest yet.

The age of free money is coming to an end as the Federal Reserve finally began to hike interest rates. Inflationary pressures no longer make the policy of endless stimulus packages tenable. However, it will take time and a close eye before changes start to affect markets in a meaningful way. You can be sure that we are at the beginning of the pendulum starting to swing back in the other direction. The only thing that seems sure in the future is higher interest rates are coming for everyone.

The Call

With a relatively light week of reports due out this week, precious metals prices will be driven by headlines driven by the fallout from the war in Ukraine. Precious metals prices look like they will remain range-bound with subdued movements compared to last week. On the upside 2000 remains an important psychological and technical level with a lot of resistance there. A weekly close above there will be a good bullish indicator

Last Week in Review

The big news last week was the hike of interest rates in the US by the Federal Reserve on Wednesday. They rose rates by 0.25%, to 0.25% – 0.50%, the first rise since 2018. Precious metals began pricing in the rate hike by shedding price heavily on Monday and Tuesday. By the time the announcement came out gold was hovering around the 1900 level. After the announcement, it began to rally but still closed the week for a loss from the previous week’s close.

Supply chain problems continue to compound around the world. Commodity prices from energies to grains to metals rise as inventories become scarce with no expectations of those chains being restored providing price relief anytime soon. Everything is about to get more expensive.