CPM Group Trade Signal - April 15, 2021
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Prices as of 12 noon. EDT (15h00 GMT) 15 April 2021 $1,769.20 (Basis the June 2021 Comex Contract).
Target Price / Range: $1,750
Timeframe: 16 April-2021 to 23-April-2021
Gold prices broke above technical resistance today and rose sharply, along with other precious metals and copper. The moves appeared to have been triggered by a sharp decline in U.S. Treasury bond yields, and then were amplified by technically inspired buying in Treasuries and buying across the metals complex.
The Treasury bond move was a reaction to Fed Chairman Jerome Powell reiterating that the Fed will be ultra-accommodative for years to come. He said that the Fed would be likely to pull back from its bond purchase program before raising rates. This was nothing new and a mere reinforcement of often repeated policy statements in the past several months. The bond market took it as a signal to buy, which triggered those technical buy points, while the metals markets took the bond yield decline as a signal to buy, triggering those technical buy orders.
Since the moves were based on nothing substantively new, there may not be much if any follow through. There are no events visible on the immediate horizon that could stimulate further declines in bond yields and increases in metals prices. CPM would be hesitant to buy into this trend, given the expected lack of follow-through buying.
We would be cautious sellers. While it often is not wise to trade against the trend, today’s upward move in prices does not seem likely to have strong follow through buying.
CPM’s 8 April Precious Metals Advisory report had $1,770 as the potential high for April, and $1,800 as possible in May and June. We also continue to expect seasonal weakness in prices during the next three months.
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.