Guardian Weekly Market Report 99

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Issue 99 – The week of January 8th, 2024

Key Resistance and Supports: Upcoming Week

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SupportResistance
2023.502065.50
1980.002091.00
1948.002128.00
Gold
SupportResistance
22.7224.33
22.5924.82
22.0625.20
Silver

Reports of Note due out this week:

Key takeaways this week will be the latest inflation figures to be released with the Consumer Price Index on Thursday and Producer Price Index Friday. Also being releasde are reports on consumer credit, the trade deficit and wholesale inventories.

  • Monday has consumer credit being released at 3:00 PM.
  • Tuesday at 8:30 AM we see the release of the Trade Deficit for November.
  • On Wednesday the Wholesales Inventories will be released at 10:00 AM.
  • Thursday at 8:30 AM sees the weekly release of the Initial Jobless Claims for the week ending January 6. Forecast is for an increase to 210,000 from 202,000 last week. Also the Consumer Price Index (CPI) for December is expected to show a small increase while the Core CPI in expected down slightly. Yearly CPI is expected to see an increase to 3.3% from 3.1%
  • Friday sees the Producer Price Index (PPI) and the Core PPI (year over year). Both are expected to be slightly higher.

Geopolitics

In 2023, the gold market experienced a historic year, with prices hitting all-time highs and record-breaking demand reported by major mints. Reports from the British Mint noted a 7% increase in customers investing in precious metals, citing safe-haven demand as a primary motivator. Notably, there was a rise in digital gold sales, particularly in smaller fractionalized amounts like 1-gram bars and one-tenth-ounce gold Britannia coins. Traditional gold sovereign coins and silver Britannias remained popular. The Royal Mint’s Director of Precious Metals, Andrew Dickey, emphasized the appeal of gold investments, indicating a higher number of investors than in the 2020 lockdown boom. Looking ahead, the mint foresees continued strong bullion demand in 2024, propelled by potential central bank rate cuts and ongoing geopolitical uncertainties. While demand surged, the year also witnessed increased selling activity, with a record number of investors selling back their gold investments, likely benefiting from higher prices.

A collision between a Japan Airlines Airbus A350 and a Japanese coast guard aircraft at Tokyo’s Haneda Airport prompted investigations into why the smaller plane was on the same runway. While officials retrieved voice and flight recorders from the coast guard plane, police began probing potential professional negligence. All 379 passengers and crew evacuated safely after the crash, with witnesses describing the impact and fire. The coast guard aircraft was heading for earthquake-affected areas with relief supplies. Prime Minister Fumio Kishida assured the accident would not hinder aid delivery. Despite the incident, passengers like William Manzione felt relieved they had narrowly escaped a severe outcome. The investigations are ongoing to ascertain the cause of the collision.

New guidelines were released as the IRS will now enforce the $10,000 reporting rule for digital asset transactions under the Infrastructure Investment and Jobs Act. Brokers must report these transactions to reduce money laundering and tax evasion risks. Despite lawmakers’ pushback and ongoing legal challenges, compliance is mandatory for businesses handling crypto assets, demanding information like sender details within 15 days of transactions. Ambiguities persist, notably regarding reporting procedures for decentralized transactions. The lack of clear guidelines and unresolved questions on reporting standards pose challenges for compliance. The IRS is expected to issue updated regulations and guidelines to address these concerns soon.

Following a devastating earthquake in Japan, the U.S. pledged aid, readying military and logistical support. The 7.6 magnitude quake struck the Noto peninsula, killing 126, displacing 33,000, and leaving over 200 missing. Japan declined aid offers, focusing on their response. With uncertain damage, rescue efforts struggle due to severed roads. Potential casualties might surpass the 2016 quake. U.S. forces in Japan stand ready for support. The tsunami and flooding caused further damage, impacting nearly 300 acres and leading to one missing person. Recovery efforts are underway, but the disaster raises concerns about nuclear plant restarts. Japan allocates funds to aid the affected. The quake’s severity underscores the need for international assistance in disaster management and response.

The Call

We expected gold to trade between 1925.00 and 2075.00 for the last two weeks of 2023 while we were on holidays. We were half right as gold rallied to to top end of our trading range and stayed close to 2050.00 per ounce. The Friday employment numbers have muddied the waters somewhat as the Fed has signaled it may still have to raise rates instead of the market expectations of interest rate cuts starting as early as March.  We believe the gold price will move lower and test 2000.00 an ounce and possibly dropping towards 1950.00 per ounce in the next few weeks.

Last Week in Review

Gold opened Monday evening at 2065.40 spot and then traded higher hitting 2080.80 Tuesday morning. Gold then sold off slowly for the rest of the week making its low on a spike down on the employment numbers  of 2023.50 before rallying and settling the week at 2045.40.

Silver opened Monday evening at 23.85 and like gold drifted higher to make the high of 24.15 early Tuesday morning. Silver then sold off slowly hitting the low of 22.68 mid morning on Thursday. Like gold, silver sold off on the employment numbers before rallying and ending the week at 23.20.

  • The U.S. Dollar Index finished the week at 102.41.
  • The Gold/Silver Ratio moved lower to finish at 88.2 ounces of silver for 1 ounce of gold.
GoldSilver
Open2065.4023.85
High2080.8024.15
Low2023.5022.68
Close2045.4023.20
Last Week’s Gold and Silver Ranges

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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