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Issue 103 – The week of February 5th, 2024

Key Resistance and Supports: Upcoming Week

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SupportResistance
2006.002070.00
1989.602100.00
1953.002145.00
1924.502160.00
Gold
SupportResistance
22.2523.63
21.8724.13
21.1624.80
20.7525.70
Silver

Reports of Note due out this week:

This week several Federal Reserve officials will deliver remarks after the Federal Reserve kept interest rates unchanged and Chairman Jerome Powell said a rate cut at the Fed’s next meeting in March was not likely as they look for more evidence inflation is under control. Treasury Secretary Janet Yellen testifies before Congress on the U.S. financial stability. This week’s economic indicators include the annual Consumer Price Index, report on consumer credit and the U.S. Trade Deficit.

  • Monday sees the release of the S&P final U.S. services PMI at 9:45 AM followed by the ISM services PMI for January at 10:00 AM.
  • Tuesday, we hear from 4 Federal Reserve officials throughout the day.
  • On Wednesday, the U.S. Trade Deficit will be released at 8:30 AM. Consumer Credit comes out at 3:00 PM.
  • Thursday morning sees the weekly Initial Jobless claims at 8:30 AM. along with Wholesale inventories at 10:00 AM.
  • Friday is very quiet with just the CPI annual seasonal adjustments at 10:00 AM

Geopolitics

The U.S. and U.K. conducted airstrikes targeting Iran-backed Houthi rebels in Yemen in response to Houthi attacks in the Red Sea. Launched from the USS Dwight D. Eisenhower, 36 targets were struck to disrupt Houthi capabilities threatening shipping and sailors. The strikes aimed at buried weapons storage, missile systems, launchers, air defense, and radars. The action followed over 30 Houthi attacks on vessels since mid-November, posing an international challenge. Defense Secretary Lloyd Austin emphasized defending lives and commerce in critical waterways. The strikes were part of a “multitier response” initiated after Houthi attacks in Jordan killed three American soldiers.

Angry farmers, driving heavy-duty tractors, staged protests outside the European Union’s headquarters, demanding relief from rising prices and bureaucracy. The protests, which included pelting police with firecrackers and eggs, were part of a series of demonstrations across the EU. Farmers cite challenges like increased energy and fertilizer costs due to Russia’s war in Ukraine, tough competition from cheaper farm imports, and climate change-induced disruptions. The European Commission announced plans to shield farmers from cheap imports during wartime and allow the use of fallow land. The protests influenced the agenda of an EU summit focused on aid to Ukraine, prompting leaders to address farmers’ demands.

Japan’s Smart Lander for Investigating Moon (SLIM) has regained power after running out of electricity due to its solar panels being at the wrong angle. The Japan Aerospace Exploration Agency (JAXA) re-established communication with SLIM, marking Japan as the fifth country to land a spacecraft on the moon. The probe, which achieved a precise lunar landing, resumed operations to analyze lunar rocks with its multi-band spectral camera, aiming to discover clues about the moon’s origin. SLIM’s successful pinpoint landing is considered a technological advancement that could aid future exploration, especially in hilly moon poles seen as potential sources of fuel, water, and oxygen. The probe is not designed to survive a lunar night, and its end of operation on the moon is uncertain.

Switzerland has announced a ban on the import of Russian diamonds, aligning with the latest round of European Union sanctions aimed at penalizing Russia for its invasion of Ukraine. The Swiss government has consistently adopted EU sanctions since the beginning of the conflict. The measures include a phased ban on the purchase and import of Russian diamonds. Switzerland is also implementing import bans on other goods that contribute to Russian revenue, such as pig iron and liquid petroleum gas. The list of banned exports, intended to prevent support to Russia’s military and technology sectors, has been expanded to include lithium batteries, motors for unmanned aerial vehicles, and machine tools and parts. Additionally, restrictions in the financial sector involve prohibiting Russian individuals from controlling Swiss companies providing crypto-asset services.

The Call

Gold had a strong beginning to week until a surprise surge in the monthly jobs report on Friday took the yellow metal lower closing at 2039 area. We see the support level for gold at 2000.00 being tested again with the possibility of breaking below this level and gold testing the 1950.00 to 1925.00 area at the lower end of our range. We still expect the range for the next few weeks to be from 1950.00 on the bottom to 2065.00 on the top. 

Last Week in Review

Gold opened Sunday evening at 2025.40 spot and then traded higher into Thursday where the weekly high of 2065.60 was achieved. Gold traded sideways through the night waiting for the nonfarm payrolls number to be released at 8:30 on Friday morning.. The market was expecting 185,000 and the jobs number came in at 353,000 beating even the highest expectation by 50,000 jobs. This robust number caused gold to sell off, going down $30.00 to a low of 2020.00 before a small jump  to 2039.50 for the afternoon closing.

Silver opened at 22.83 on Sunday evening and traded higher into Wednesday afternoon making its high of 23.36.Thursday morning saw a sharp sell off to 22.67 before rallying back towards the highs before the NFP number Friday morning. Another pull back and the weekly low was in at 22.40 before a bounce into the close at 22.70 in the afternoon.

  • The U.S. Dollar Index finished stronger on the week at 103.96.
  • The Gold/Silver Ratio closed a little weaker for the week at 89.9 ounces of silver for 1 ounce of gold.
GoldSilver
Open2025.4022.83
High2065.6023.36
Low2020.0022.40
Close2039.5022.70
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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