Issue 92 – The week of November 20th, 2023

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

This week is a very quiet week with the American Thanksgiving Holiday on Thursday.

• Monday sees the release of the U.S. leading economic indicators at10:00 AM.

• Tuesday at 10:00 AM we get existing homes sales followed at 2:00 PM by the Fed minutes from October 31/Nov 1 FOMC meeting.

• Wednesday, the Initial jobless claims will be released a day early due to the Thanksgiving Day holiday on Thursday. Also, at 8:30 we get the Durable-goods orders. Consumer sentiment (final) will be released at 10:00 AM.

• Thursday is the Thanksgiving holiday, and no economic indicators are scheduled.

• Friday sees the S&P flash U.S services and manufacturing PMI released at 9:45 AM.

Geopolitics

The European Commission is proposing new sanctions against Russia, the 12th since Ukraine’s invasion. These measures include banning imports of diamonds and liquid petroleum gas from Russia. The ban aims to tighten the implementation of price caps on Russian oil and includes restrictions on transit through Russia for goods enhancing Moscow’s industrial capabilities. The proposal seeks a ban on direct diamond imports and implements a traceability mechanism to prevent Russian gems processed elsewhere from entering the EU. The sanctions aim to target specific sectors and key economic actors in Russia, including military, defense, and IT sectors. Moreover, it intends to sanction additional individuals and entities seen as undermining Ukraine’s sovereignty. The EU also seeks to increase transparency in oil pricing to prevent Russia from bypassing price caps through its tanker fleet. However, challenges remain, as major shipping countries’ agreement on these measures is uncertain.

U.S. President Biden and Chinese President Xi reached agreements during their face-to-face meeting, initiating a presidential hotline and resuming military communications while addressing key disputes. Despite progress, tensions remain, notably regarding Taiwan. Biden reiterated his view of Xi as a dictator, prompting Xi to challenge negative perceptions of the Communist Party. Discussions covered diverse issues, including fentanyl production, AI, and Taiwan’s stability, with Biden urging respect for Taiwan’s electoral process. Both leaders highlighted the importance of the U.S.-China relationship, seeking to prevent conflicts amidst economic and geopolitical challenges.

In Gaza, heavy fighting near the Indonesian Hospital has raised concerns as Israel’s military intensifies its ground assault. This follows recent attention on Al-Shifa, Gaza’s main medical center. While some patients were evacuated, hundreds of patients and staff remain trapped. Israel released videos suggesting Hamas hostages and a tunnel beneath Al-Shifa, a claim disputed by Hamas and hospital staff. Negotiators are reportedly discussing a deal for releasing hostages taken during an Oct. 7 attack, potentially pausing the conflict. Over 1.6 million people are displaced in Gaza, with a death toll exceeding 13,000. Meanwhile, U.S. drones are aiding in the search for hostages, monitoring the situation and providing crucial data for potential operations.

The UK’s inflation rate took a dive to 4.6%, below projections of 4.8%, marking a two-year low. This drop, influenced by falling energy prices, potentially paves the way for Bank of England (BoE) rate cuts. Despite this, analysts suggest the last phase of reducing inflation will be challenging. The economy’s stagnation and softer inflation support the view that the BoE’s rate hikes have ceased. The situation appears uncertain due to stagflation concerns and a bumpy economic road ahead. Finance Minister Rishi Sunak heralded this as fulfilling his earlier pledge to halve inflation this year. However, the National Institute of Economic and Social Research (NIESR) urged focus on the BoE’s 2% target. Despite the decrease, Britain’s inflation rate remains the highest among G7 nations. This development has amplified bets on BoE rate cuts in 2024, signaling a probable shift in monetary policy.

The Call

Trading activity and volumes this week will be lighter than usual owing to the U.S. Thanksgiving Holiday on Thursday. The Gold market saw solid bullish momentum since the CPI release on Tuesday and prices bounced off the recent low of 1935.00 an ounce. The rally took us ever so close to 2000.00 an ounce again. Investors are hoping inflation is under control and interest rates will start to fall as soon as May next year. We would expect Gold and Silver to trade in that range of Gold 1935.00-2000.00 and Silver 22.00 – 24.25 baring any major news on the war fronts.

Last Week in Review

Gold opened Sunday evening at 1940.50 spot and then traded lower through Monday morning making the weekly low at 1932.70. Gold then began to rally with the release of the U.S. CPI number on Tuesday morning and with other favorable economic indicators during the week and lasted  until making the high Friday morning at 1993.50 and finally settled at 1980.40 Friday afternoon.

Silver opened at 22.37 on Sunday evening and like Gold drifted lower into Monday morning making the weekly low at 21.88. Silver then rallied the rest of the week hitting its high on Friday of 24.18. With a little profit taking, silver finished off the week closing at 23.74.

• The U.S. Dollar Index finished down sharply on the week  at 103.92.
• The Gold/Silver Ratio closed much stronger for the week at 83.5 ounces of silver for 1 ounce of gold.

	Gold	Silver
Open	1940.50	22.27
High	1993.50	24.18
Low	1932.70	21.88
Close	1980.40	23.74