Contributed Commentaries
CPM Group Trade Signal - March 5, 2021
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
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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.
