Precious Metals Week in Review 22/08

 Here are your Short-Term Support and Resistance Levels for the upcoming week.  

Gold                           Silver

Support                       4380/4308/4239         64.83/62.84/61.00

Resistance                   4518/4587/4640         66.66/68.65/70.58

Platinum                    Palladium

Support                       1750/1700/1649         1274/1232/1164

Resistance                   1801/1851/1902         1384/1452/1494

1. Gold prices pushed higher last week, as fading expectations for a September Fed rate hike helped the precious metal extend its August rebound despite intermittent pressure from a firmer dollar, rising oil prices, and profit-taking. Spot gold kicked off the week trading at $4,342.50 per ounce on Sunday evening, and the yellow metal moved steadily higher through Monday and Tuesday as traders positioned for the week’s U.S. inflation data. The rally accelerated Wednesday after July CPI came in largely in line with expectations. This, easing concerns that the Federal Reserve would need to tighten policy in September and helped gold prices push to a 10-week high. Spot prices ultimately set their weekly high at $4,450.23 per ounce on Thursday before sellers took over. The latest Weekly Gold Survey showed Wall Street experts overwhelmingly bullish on the precious metal’s prospects, while Main Street sentiment also held in firmly bullish territory heading into next week. 
2. Emerging-market currencies rose to a record high as bets on a Federal Reserve interest rate hike cooled, spurring demand for risk assets. A gauge tracking emerging-market currencies advanced as much as 0.2% to 1,906.98 on Monday, touching an all-time high, while a similar gauge for equities climbed as much as 0.6%. Gains were supported by a weaker dollar. "Asian currencies look to be riding the tailwinds of softer U.S. data last week and the softer USD tone into the start of this week," said Galvin Chia, an emerging Asia strategist. "The lack of geopolitical headlines over the weekend and Brent prices below $90 have also likely helped, compounded by what seems to be late stages of quieter summertime markets." 
3. The U.S. consumer has displayed remarkable resilience this year amid high gas and food prices. But that resilience may soon be put to the test. Powered by higher-than-planned tax refunds, second quarter sales at consumer companies rose 5.9% year over year among the median S&P 500 consumer discretionary companies and 3.9% for the median consumer staples company. The strength in consumer spending was broad-based, with same-store sales, a key metric for retailers, accelerating companies serving both lower- and higher-income consumers. 
4. Homebuilder sentiment in the U.S. barely improved this month as elevated construction and borrowing costs continued to restrain the housing market. The overall Housing Market Index edged up 1 point to 35 this month. A reading below 50 indicates more builders see conditions as poor than good and the index has remained below that level since May 2024. "Our latest builder survey continues to show signs of weakness in the home building market," NAHB Chief Economist Robert Dietz said in a statement. "August marked the 16th straight month that at least 30% of builders reported cutting prices to support demand, as well as the 16th consecutive month with the HMI below 40." Among the index's components, the gauge of present sales rose 2 points to 39. Measures of both future sales expectations and prospective buyer traffic were unchanged from a month earlier. 
5. In the week ending August 15, the advance figure for seasonally adjusted initial claims was 206,000, a decrease of 6,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 209,000 to 212,000. The 4-week moving average was 204,000, an increase of 4,250 from the previous week's revised average. The previous week's average was revised up by 750 from 199,000 to 199,750. 
6. Oil prices climbed to more than three-week highs on Thursday. Brent crude futures for October delivery were up $2.19, or 2.39%, to $93.81 a barrel, while U.S. West Texas Intermediate crude futures for September added $2.33 to $88.16 a barrel. The more active October WTI contract was up $2.44, or 2.89%, to $86.83. 
7. EUR/USD heads for a fourth consecutive weekly gain on Friday, although it has erased its earlier intraday advance. At the time of writing, the pair trades around 1.1682 after briefly rising above 1.1700, its highest level since May 14. 
8. USD/JPY trades around 158.85 on Friday at the time of writing, edging lower after rebounding from the 158.00 level on Thursday. The pair remains under pressure as the Japanese Yen benefits from fresh inflation data supporting further monetary tightening in Japan, while the U.S. Dollar remains close to its lowest levels since May. 

Precious metals have become one of the standout trades of the month; clawing back losses suffered earlier in the year, silver even more sharply than gold. Gold touched an all-time high of $5,598 an ounce in January, before a sharp pullback during the year dragged it down to around $3,942 by the end of June. Since that low, the metal has rebounded with the bulk of the move happening in August and is trading around $4,627 at the time of writing. Silver's rally has been even more dramatic. The metal hit an all-time high of $121.65 an ounce on January 29, before tumbling to around $54.75 by mid-July, a slide of roughly 55% from its peak. It has since climbed by around 27% and is trading at around $69.50 at the time of writing. The latest leg higher in precious metals gathered pace this week after the U.S. Treasury doubled the size of its buybacks of 10 to 30-year debt to at least $4 billion per operation from 9 September, aiming to calm a jittery bond market.

U.S. 30-year Treasury yields rose to their highest level since 2007 on Tuesday as stalled talks to end the U.S.-Iran war and worries of an imminent escalation sent oil prices above $90 a barrel, fanning fears of inflation and jolting markets. The yield on the benchmark 10-year Treasury note rose 1.7 basis points to 4.739%. The yield on the 30-year bond rose to 5.327%, hitting its highest level in 19 years. The bond selloff also spread to Japan and Europe with Japan's benchmark 10-year government bond yield rising to a 30-year peak. Germany's bund futures and French OAT futures dipped 0.2%. Germany's 10-year Bund yield touched its highest level since May 2011 on Monday, while France's ⁠10-year yields hit a 17-year high. Two recent Treasury auctions also drew attention for their yields as the sale of 10-year notes cleared at a high yield of 4.683%, the highest in 19 years, while the 30-year bond auction stopped at 5.216%, a 25-year peak.

Mortgage rates fell slightly during a dramatic week for bond markets that saw the 30-year Treasury yield hit its highest level since 2007, prompting the US Treasury to boost its buybacks of long-term debt. The average 30-year fixed-rate mortgage was 6.65% this week through Wednesday, from 6.67% a week earlier, according to Freddie Mac data.

Volatility should be expected to remain high as investors will be closely watching for hints on the upcoming monetary policy direction. Many investors have redoubled their efforts to ensure that their portfolios are sufficiently diversified in the hope that they will be able to withstand corrections in multiple market sectors. Many of these investors have included physical precious metals as part of their diversification plans, given their long history as a hedge against both inflation and during times of economic turmoil. Remember, the key to profitability through the ownership of physical precious metals is to own the physical product and hold it for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long run.

Trading Department – GCILBullion. 

This is not a solicitation to purchase or sell.