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CPM Group Trade Signal - March 29 2021

Commentaries & Views

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Time Stamp
Prices as of 2:37 p.m. EST (17h37 GMT) 29 March 2021 $1,708.30 (Basis the April 2021 Comex Contract).

Direction: Buy

Target Price / Range: $1,718

Timeframe: 30-March-2021 to 06-April-2021

CPM has held Stand Aside Trade Recommendations since 8 March, after it had a Sell recommendation earlier in the month. CPM expected gold prices to trade a relatively narrow range while financial market participants struggled to make sense of the current state of the economy and prospective directions across markets.

Gold has traded in the ranges CPM has expected.

Last week, 22 March, CPM reiterated its Stand Aside recommendation, but added that a drop to $1,710 - $1,715 at this time probably would trigger a buy recommendation. The view was that gold continued to show a greater proclivity to rise above recent ranges rather than fall.

Gold fell to as low as $1,703.30 Monday 29 March in New York trading.

The cause of the decline on 29 March was unclear. Market rumors were that it was somehow related to large position liquidations held by a hedge fund that had missed its margin requirement deposits on Friday, triggering various banks and brokers to liquidate positions held by the fund in order to square up the margin accounts. Somehow it was assumed that these liquidations included gold, although at the time of this writing there were no indications that gold was involved and, frankly, it does not quite seem likely that this was the case. Assuming these market assumptions are inaccurate adds to the likelihood that gold prices will quickly recover, as such rumors are common and often followed by a reversal when the fallacy of the rumors becomes more broadly apparent in the markets.

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.