Guardian Weekly Market Report 75

Issue 75 – The week of July 24th, 2023

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

The July FOMC meeting kicks off on Tuesday with the Federal Reserve policymakers meeting for 2 days to announce an interest rate decision Wednesday afternoon at 2:00 PM followed by a press conference featuring Fed Chair Jerome Powell at 2:30 PM.

• Monday will see the release of S&P ”flash” U.S. manufacturing PMI and U.S. Services PMI at 9:30 AM.

• Tuesday at 9:00 AM see’s the release of the S&P Case Shiller home price index followed at 10:00 AM by the Consumer Confidence Index for July. Day 1 of the July 2023 FOMC meeting. 

• Wednesday at 10:00 AM we see the release of New Home Sales for June. Also Day 2 of the July 2023 FOMC meeting. A majority of traders expect the Fed will hike interest rates by 25 basis points to a range of 5.25% –  5.50%. This 2:00 PM announcement will then be followed by Fed Chair Powell’s press conference at 2:30 PM.

• Thursday, we see the Weekly Initial Jobless Claims in the US and a plethora of indicators as follows; Durable Goods orders, GDP, Advanced U.S. Trade balance of goods, Advanced retail inventories, Advanced wholesale inventories and Pending home sales.

• Friday brings Personal Income and Spending (Jun) and Personal Consumption Expenditures (PCE) Price Index (Jun) and Michigan Consumer Sentiment Index for June.

Geopolitics

Russia has suspended the Black Sea Grain Initiative, an accord allowing grain exports from Ukraine to countries in Africa, the Middle East, and Asia, citing demands for easier export access for its agricultural shipments. The agreement was brokered to allow food to leave the Black Sea region after Russia invaded Ukraine 18 months ago. The suspension may impact food security in developing nations as the deal provided assurances of safe shipping and helped stabilize food prices. Ukraine accuses Russia of preventing new ships from joining the initiative and causing shipment delays, affecting grain volumes. The suspension has already led to a three percent increase in wheat prices in Chicago trading.

Four individuals were arrested in Germany for stealing ancient gold coins from a museum. The stolen coins, over 2100 years old, were part of the largest discovery of Celtic gold in more than a century. Authorities recovered some gold believed to be from the treasure. The suspects, also linked to other robberies, used sophisticated methods to carry out the heist and avoided triggering alarms. The investigation led to the recovery of equipment used in the thefts, and vehicles rented by the suspects were found to have scouted other potential targets, including museums. The stolen coins, valued at several million euros, are considered irreplaceable cultural artifacts. The suspects face possible indictment and up to 10 years in prison.

China’s Commerce Ministry expressed concerns over non-economic factors interfering with the country’s foreign trade, stating that the situation in the second half of the year is “extremely severe.” The ministry’s head of external trade, Li Xingqian, pointed to some countries’ efforts towards “decoupling,” supply chain diversification, and “de-risking” as human-made obstacles affecting normal commerce. The global economic slowdown has contributed to a plunge in China’s exports, and Li noted that trade had risen during the pandemic, setting a high base for this year’s figures. While China aims to attract foreign investment, tensions with the US and other countries have led to export controls and trade restrictions. The ministry also plans to establish regular roundtables with foreign businesses and allow foreign investors to increase strategic investments in listed companies.

More than 40 countries have reportedly expressed interest in joining the BRICS bloc of major developing economies, according to South Africa’s ambassador to BRICS. The bloc, consisting of Brazil, Russia, India, China, and South Africa, is considering expansion, with countries like Argentina, Bangladesh, UAE, Iran, Saudi Arabia, and some European nations expressing interest in membership. The BRICS nations represent a significant portion of the world’s population but have limited voting rights in institutions like the World Bank and IMF. South Africa, the host of the upcoming BRICS summit in Johannesburg, aims to increase the bloc’s global influence. While rumors of a gold-backed currency announcement have surfaced, the ambassador denies it, emphasizing the focus on trading and settling in local currencies while reducing reliance on the US dollar.

The Call

There is almost a 100% expectation that the Fed will raise rates a quarter of a point at this week’s meeting.  This bump in interest rates will help the U.S. Dollar and weaken both silver and gold into Wednesday’s announcement.  We would think the metals will retreat early in the week and then recover after FOMC meeting on the 26th of July is behind us. Volatility is the call of the week!

Last Week in Review

Gold opened the week at 1957 on Sunday evening and traded lower to the weekly low Monday morning of 1947.00. The rally started Tuesday and picked up steam after the Retail Sales number to make a daily high of 1986.00.  Thursday’s economic indicators supported a rally to a slightly higher high at 1988.00 which was the high of the week. From here we traded lower closing Friday at 1962.00 after making a fresh weekly low of 1957. 00.

Silver had a week of consolidation with a narrow trading range between 24.63 and 25.35.

• The U.S. Dollar Index rallied a little to  close the week back above 100.00 to the 101.09 area.
• The Gold/Silver Ratio closed out the week a little weaker at 79.9 ounces of silver for 1 ounce of gold.

	Gold	Silver
Open	1957	25.02
High	1988	25.35
Low	1947	24.63
Close	1962	24.65