Issue 46 – The week of January 3rd, 2023

Key Resistance and Supports: Upcoming Week

Reports of Note due out this week:

Even though the first week of the year is a shortened one due to many countries taking the New Year’s Day holiday on Monday the 2^nd there are some significant reports out. 

First, on Wednesday there will be the release of minutes from the last FOMC meeting. This should flush out the statement from the last interest rate announcement concerning the Fed’s future rate policy. Look for continued hawkish going forward for the next few rate announcements.

Next out will be Thursday’s ADP employment figures. They should probably show gains as businesses hired more staff for the holidays. This should give equities a boost.

Friday will see both US and Canadian employment reports. Both releases should be good especially if the ADP report is positive. Precious metals could shave some of their recent gains as bargain hunters look to pick up equities on the cheap.

Geopolitics

As 2023 starts, lots is happening around the world. Probably the most important change is the near cancellation in China of the zero Covid policy. People are now allowed to do what they like without restrictions not just domestically but also internationally. While many nations have announced a negative proof of test for Chinese nationals travelling, for fear of a renewed Covid surge, the implications for the global economy are good. Chinese manufacturing getting back up to full speed, and supply chain disruptions and bottlenecks will recede. This bodes well for precious metals prices this year.

The war in Ukraine continues to be a slow grind with the Russians losing ground with each passing day. One bit of news that has seemed to fly under the radar of most of the world press is how naval insurers have cancelled coverage for vessels traversing the Black Sea. They are still free to sail the Black Sea but if something untoward should occur the ship’s owner will be on the hook for all related costs. Are the insurers expecting heightened naval military conflict this year?

The International Monetary Fund (IMF) is predicting that this year a third of the world’s economies will enter a recession. Looks like 2023 is going to be a rocky road indeed.

The Call

Precious metals have started the year on a tear upward and look strong. That trend looks like it will continue through to the end of the week where it will meet the double-edged sword of US and CAD employment reports and end-of-week profit taking. How much of an end of week’s sell off happens very much depends on the strength of the employment reports. Look for precious metals prices still to finish the week higher.

Last Week in Review

	Gold	Silver
Open	1800	23.87
High	1833	24.27
Low	1796	23.44
Close	1823	23.95