Issue 60 – The week of April 10th, 2023

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

The front end of the week will be quite light with reports, but Wednesday will start to see significant releases begin. The one thing that will be a week-long event is the IMF meeting from Monday to Friday. This meeting could have more impact on markets next week than this week as the closing statement will be released after the market close on Friday.

Wednesday will be a full day of releases on both sides of the border. The day will kick off with US CPI for March being released. Both the month-on-month and year-on-year reports will be released. Markets will be watching to see if inflationary pressures are being contained. Both reports are expected to show a small fall in prices. Any indication that inflation will remain strong will boost precious metals.

US CPI will be followed by the Bank of Canada’s interest rate decision. At this point, the Bank is expected to leave rates unchanged at 4.5%. The markets have likely already priced this in. Any surprises may come from the Bank’s press conference an hour after the actual announcement.

The final report will the release of FED meeting minutes from last week. FED watchers will go through these with a fine-toothed comb to try to see what the next intentions of the FED will be.

Thursday looks to be light for releases. The most important release of the day will be US PPI month on month for March. The previous report came in at -0.1%. The current report is expected to be +0.1%. Still showing inflationary pressures exist in the manufacturing sector. This should be a bullish indicator for precious metals prices.

Following this will be a speech by Bank of Canada governor Macklem. Markets will pay close attention to his remarks.

Friday has only two reports of note being released. The first and more important will be the US retail sales month-on-month for March. The market is expecting this report to match the previous one showing a -0.4% fall. This a sign that inflation is still affecting household spending which could point to further FED rate hikes and add to bullish sentiment for precious metals prices.

The final report will be CAD month-on-month manufacturing sales for February. The previous report printed +4.1% and Friday’s is expected to print -2.5%. This negative print would be bullish for precious metals and bearish for the CAD dollar.

Geopolitics

There is an old saying which goes somewhat along the lines of there’s a lot of flux in the air. What that means is change is afoot. Not just minor changes but changes that propel us all into a new and undiscovered environment. Collectively as a species, we are at one of those moments in history. That moment is Artificial Intelligence or AI. If you think the world has changed a lot in the past six months just wait for the next six. Expect two words: exponential change. In every aspect of your life. It is already happening in more ways than you can imagine.

So how does this translate to the world of precious metals you ask? Well AI runs on computers and what do computers require? A key element that computers use to connect and communicate are precious metals such as gold and silver. As AI explodes across the globe demand for precious metals will also exponentially explode. Gold is a rare resource silver on the other hand is abundantly available around the world.

If you haven’t been paying attention to changing moments now is the time to learn what the next technological tsunami is going be before it washes over you.

The Call

With precious metals’ valuations continuing to soar and approach levels not seen in some time, taking a long-only stance seems logical. Any potential drop in prices should be viewed as an opportunity for prospective investors to augment their precious metal holdings, whether as a starting point or as a supplement. However, it’s important to note that this current market does not lend itself to short selling. For those who have invested in metals at previous lower levels, it may be wise to consider taking profits periodically, as the old adage from market traders goes: bears and bulls profit, while pigs get slaughtered. Attempting to predict the highest and lowest prices is a fool’s errand, and a futile one at that. Ultimately, remaining vigilant and avoiding trying to “pick tops or bottoms” is the best strategy, as markets have a tendency to fluctuate.

Last Week in Review

• Last week, precious metals prices continued to move strongly upwards, but they paused once they hit important levels both technically and psychologically, which were $2000 for gold and $25.00 for silver.
• China announced an 18-tonne purchase of gold in March, which showed that their gold buying spree had no signs of stopping.
• Texas announced they have intentions to release a state-issued gold-backed digital currency.
• The Perth Mint felt relieved as it was cleared by the LBMA over allegations its refining standards were not in compliance with the Shanghai exchange during the 2018-2021 period.

	Gold	Silver
Open	1957	23.82
High	2031	25.12
Low	1949	23.55
Close	2005	24.93