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CPM Group Trade Signal – February 11 2020

Commentaries & Views

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Time Stamp
Prices as of 11:45 a.m. EST 11 February 2020 $1,568.55 (Basis the April 2020 Comex Contract).

Direction: Stand Aside

Target Price / Range: $1,550 - $1,600

Timeframe: 11-02-2020 to 18-02-2020

Gold prices have been moving in a mostly sideways fashion (with a technical pennant forming) over the past couple of weeks and are vulnerable at this time to a sharp move higher or lower. CPM Group’s bias is for gold prices to move higher over the next period of time. However, on a short term basis prices could move $25 in either direction over the next few days.  CPM would advise its clients on purchasing a short term options straddle in this market environment. 

On the upside gold prices have initial resistant at $1,585. If prices are able to settle above this level, prices could rise toward $1,600 or higher. On the downside initial support for prices is positioned at $1,560 which if broken could result in prices slipping back to $1,550.

Gold’s role as a portfolio diversifier is in play at this time, with investors keeping gold at elevated levels despite – or maybe exactly because – equity markets reaching record high levels. There is still a fair bit of uncertainty surrounding the coronavirus, which should keep gold prices range bound at elevated levels in the near term. Any definitive clarity on the spread and economic impact could be weeks away. The U.S. fiscal 2021 budget proposal released Monday 10 February also will focus markets on the U.S. government’s on-going issues with division and a lack of credibility, while the U.S. political process also will lend support to investors’ interest in gold.

Note: Discretion should be allowed at +/- $0.50 from the target.


Disclaimer – Past performance is no indication or guarantee of anticipated future profits, and neither Kitco Metals Inc. nor CPM Group can accept any liability or responsibility for any loss suffered as a result of gold price fluctuations. Gold as a commodity is not a specified investment for the purpose of giving advice under the Financial Services and Markets Act 2000. Therefore this trade recommendation does not give rise to rights to claim compensation under the Financial Services Compensation Scheme. CPM Group is a registered CTA with the U.S. NFA and CFTC. At times the principals and associates of CPM Group may have positions in the precious metals, commodity, and equities markets. CPM Group also manages investment and industrial positions in markets for its clients.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.