Guardian Weekly Market Report 85

Issue 85 – The week of October 2nd, 2023

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Coming up this week we have updates on the jobs markets, starting with the August Job Openings and Labor Turnover Survey (JOLTS) on Tuesday, ADP National Employment Report on Wednesday and September nonfarm payroll report on Friday.

• Monday we start with the S&P final U.S. manufacturing PMI for Sept. at 9:45 am followed by ISM manufacturing and construction spending at 10.00 am.
• Tuesday at 10:00 brings the Job Openings and Labor Turnover survey (JOLTS) for August. 
• Wednesday we will see the ADP employment report (Sep), S&P Global Services and Composite PMI Final Readings for September, ISM Services PMI for Sept. and Factory orders for August.
• Thursday, we will get the Weekly Initial Jobless Claims in the U.S.at 8:30 AM, and the U.S. trade deficit.
• Friday will see the release of the all important NFP or U.S. Nonfarm Payrolls Report for September at 8:30 AM.

Geopolitics

The Writers Guild of America (WGA) and the Alliance of Motion Picture and Television Producers (AMPTP) have reached a tentative agreement on a new three-year labor contract, ending a nearly 150 day long strike that disrupted the entertainment industry and billions of dollars of GDP for the government of California. The deal includes significant gains for writers on issues such as streaming residuals, inclusion and equity, A.I. usage rights and health care. 

Credit Suisse, one of the largest banks in Switzerland, announced on Thursday that it will cut nearly 13% of its workforce, or about 10,000 jobs, by the end of 2023. The bank said the decision was part of its strategic transformation plan to reduce costs, simplify its structure and focus on its core businesses. The bank has been struggling with a series of scandals and losses in recent years, including its involvement in the collapse of Archegos Capital and Greensill Capital. The bank said it expects to incur restructuring charges of about 1.5 billion Swiss francs ($1.6 billion) over the next two years, but hopes to save about 2 billion francs ($2.2 billion) annually by 2024. The bank also said it will exit or scale back some of its non-core activities, such as prime brokerage and commodities trading, and invest more in digitalization and sustainability.

Quebec has announced a partnership with Swedish company Northvolt to build a $7.5-billion electric vehicle battery factory in the province. The project, which is expected to create 3,000 direct jobs and 10,000 indirect jobs, will produce lithium-ion batteries for the North American market. The factory will be located in the Montreal region and will have an annual production capacity of 50 gigawatt-hours, enough to power about one million electric vehicles per year. The Quebec government will invest $1.4 billion in the project, while Northvolt will contribute $6.1 billion. The federal government is also expected to provide financial support, but the details have not been finalized yet. The factory is slated to start operations in 2026 and reach full capacity by 2030.

The Call

September ended with a thud and the price of gold went a bit lower than most analysts expected. We are starting a new month which normally brings with it some fresh buying. The big problem that investors have in the metals market is the interest rate pressure upwards along with a very strong U.S. Dollar. Combined, these two make it very difficult for the metals to rally. Guardian’s experts believe the metals will develop a lower trading range very likely between 1800.00 and 1900.00 in the next month or so.

Last Week in Review

Gold opened Sunday evening at 1926.80 spot and then traded a couple of dollars higher to 1928.80 when the selling started. Gold finished lower in all 5 sessions to close out the week down 78.00 at 1846.90 Friday afternoon. We saw a rally Friday morning which took gold up to 1878.80 before the ride down resumed.

Silver opened at 23.60 on Sunday evening and traded a little higher to 23.71 before the selling started. Silver traded lower through Thursday and then Friday morning we had a strong rally to 23.60 before the collapse to finish lower at 22.18 which was a new low since the April highs.

• The U.S. Dollar Index made another new high at 106.22 for the week and settled at 106.17.
• The Gold/Silver Ratio closed much weaker for the week at 83.4 ounces of silver for 1 ounce of gold.