Guardian Weekly Market Report 82

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Issue 82 – The week of September 11th, 2023

Key Resistance and Supports: Upcoming Week

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SupportResistance
1910.001930.00
1889.001960.00
1856.001987.00
1830.002005.00
Gold
SupportResistance
22.3823.58
21.7424.00
20.8524.00
20.3525.15
Silver

Reports of Note due out this week:

This week we’ll get the latest inflation readings for August, along with last month’s retail sales figures. Also out will be an interest rate decision from European Central Bank (ECB) officials on Thursday. The United Auto Workers could initiate a labor strike if Detroit automakers fail to reach a deal with the union by Thursday.

  • Monday we see Consumer Inflation Expectations for August..
  • Tuesday is a very quiet day with no major economic reports scheduled. 
  • Wednesday see’s the release of the Consumer Price Index  at 8:30 AM. The CPI is projected to have risen 0.4% last month, which would mark the fastest monthly increase since January.
  • Thursday we will get the Weekly Initial Jobless Claims in the U.S., Producer Price Index and U.S. Retail Sales at 8:30 AM. The PPI likely rose 0.4% last month, accelerating from July’s 0.3% rate. Retail Sales, likely rose 0.4% last month which is lower than the 0.7% in July. The ECB will hold there latest monetary policy meeting and they are expected to hold interest rates steady.
  • Friday see’s Industrial Production (Aug) and the  New York Feds Empire State Manufacturing Index (Sep) at 8:30 AM. At 9:15 Industrial Production and Capacity utilization are released and the University of Michigan Consumer sentiment Index at 10:00 AM.

Geopolitics

 The G20 has welcomed the African Union (AU) as a member, marking the second regional bloc to become a permanent G20 member after the European Union. The move reflects a push to give a greater voice to the Global South, with India leading the charge. While the G20 statement didn’t directly mention Russia’s invasion of Ukraine, it called on all states to act in line with principles laid out in the U.N. Charter, which includes refraining from the threat or use of force to seek territorial acquisition. The focus of this summit was on addressing challenges faced by the developing world, including food and energy security, while the Ukraine conflict remained an underlying concern.

Following the devastating and unprecedented 6.8 earthquake in Morocco on the 8th, the world has rallied to provide assistance. France has offered its support, and Spain has dispatched search-and-rescue teams at the request of Moroccan authorities. The Royal Moroccan Armed Forces have updated the death toll to 2,122 and the number of injured to 2,421. Nonprofit organizations like World Central Kitchen flock to the area to assist the country from the largest earthquake in the area in over a century. 

The European Commission has proposed making the EU’s scheme for joint gas purchases permanent, after it exceeded expectations during its first tenders to source non-Russian gas. This initiative was launched in 2023 after Russia drastically reduced gas deliveries to Europe in 2022, causing a surge in European energy prices. The temporary scheme, initially set to expire in December, has now been proposed as a permanent fixture as part of a broader revamp of EU gas market rules. While participation in joint gas buying would remain voluntary, it would become mandatory if the EU faces a fuel supply crisis to prevent competition for scarce resources among member states. Negotiations between EU member states and the European Parliament will determine the final outcome of this proposal.

The US and Saudi Arabia are reportedly in talks to secure access to vital metals in Africa, essential for their energy transition goals. A state-backed Saudi initiative may invest $15 billion in mining assets across African countries like the Democratic Republic of Congo, Guinea, and Namibia. This investment would also give US companies the right to purchase part of the production. Both nations are eager to secure metals like cobalt and lithium, crucial for electric vehicle batteries and electronics. They aim to catch up with China, a dominant player in this resource race. The White House is seeking support from other regional sovereign-wealth funds, with discussions with Saudi Arabia reportedly the most advanced. Neither the Saudi government nor the White House has immediately commented on these reports.

The Call

Robust economic activity will continue to support the U.S. dollar’s vice like grip on the gold market and keep prices trapped in their current trading range on the December contract between resistance around $1980.00 and support at $1920.00. The U.S. dollar remains well positioned to move higher and that is going to make it difficult for gold to go higher. However, after relatively slow week, the economic Calendar picks up with the release of the U.S. Consumer Price Index, Producer Price Index and Retail Sales. Rising energy prices are likely to put upward pressure on inflation and we see potential for gold to test the top of its range if this happens.

Last Week in Review

The price of Gold opened Sunday evening at 1942.60 spot and then traded a little higher to 1948.50 to hit the high for the week. The price then slid into Wednesdays low of approximately 1916.00. It traded sideways to higher into Friday and had a pop Friday morning to roughly 1930.00 before giving up the gains to close near the lows at 1918.50.

Silver opened at 24.28, rallied slightly to a high of 24.37 on Sunday evening and then the selling started and did not subside until the week was done. Silver hit its low Friday of 22.84 and closed out the week at 22.92.

  • The U.S. Dollar Index was stronger again this week to the demise of the metals and finished a little over the 105.00 mark.
  • The Gold/Silver Ratio widened out and closed out the week at 83.8 ounces of silver for 1 ounce of gold.
GoldSilver
Open1942.6024.28
High1948.5024.37
Low1915.9022.85
Close1918.5022.92
Last Week’s Gold and Silver Ranges

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The information contained in this report is intended to provide market commentary and not as a recommendation or as a basis for investment decisions. The views expressed herein are the author’s and may differ from the views of others at Guardian International Gold. Guardian International Gold is a trader of Precious metals and this communication is to be considered an invitation to trade. Guardian International Gold makes our best effort to communicate reliable information but no express or implied warranty or representation as to its accuracy, completeness, or correctness may be taken.

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