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CPM Group Trade Signal - March 5, 2021

Commentaries & Views

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Time Stamp
Prices as of 9:56 a.m. EST (14h56 GMT) 5 March 2021 $1,690.70 (Basis the April 2021 Comex Contract).

Direction: Sell

Target Price / Range: $1,675

Timeframe: 05-March-2021 to 12-March-2021


Gold prices look vulnerable to the downside. The impetus for near term weakness in gold comes from various factors such as increased optimism about economic recovery, some reduction in political risk in the U.S., but most importantly from a jump in 10-year U.S. bond yields. While on a longer term basis bond yields are still very low they have risen quickly and sharply in recent weeks. Additionally, the Fed does not plan to control the increase in longer dated rates at this time. While markets’ expected yields to rise over the course of 2021 and possibly approach 1.5% later in 2021, the gains have been stronger and arrived sooner than the market had expected. This suggests stronger economic expectations than previously was the consensus. Such expectations of course can dissipate or reverse as easily and quixotically as they strengthened, but for now they are market reality. All markets are in a phase of adjusting to these increases. Gold is particularly sensitive to interest rates rising. Furthermore, while inflation expectations have also been rising they have plateaued off lately, which is putting upward pressure on real rates, which has a greater negative impact on gold prices.

Note: Discretion should be allowed at +/- 0.20% of the price at the time each TR is issued from the target. Recommendations are valid until the target date or a new Trade Recommendation or message is issued by CPM. 


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.