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CPM Group Trade Signal - May 7, 2021

Commentaries & Views

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Time Stamp
Prices as of 10:04 a.m. EDT (15h05 GMT) 7 May 2021 $1,839.00 (Basis the June 2021 Comex Contract).

Direction: Buy

Target Price / Range: $1,850

Timeframe: 7 May 2021 to 14 May 2021

Gold traded between $1,754 and 1,800 for around two weeks until yesterday when prices topped $1,800. Fundamentally the upward and downward pressures on gold on a short-term basis were pretty well balanced, but has shifted to the upside over the past couple of days.

Patterns in U.S. Treasury interest rates remain the key to gold and other asset prices, which markets are struggling to guess whether rates will rise or fall. CPM’s view is that interest rates remain low and will remain low compared to historical levels. While there is some upward pressure on rates, they may remain around current levels.

Employment data April for the U.S. released today was much worse than expected, adding further upward pressure on gold prices. The ongoing pandemic, while much better contained in developed economies, is still ravaging developing countries. With gold prices up sharply within a very short time, there may be some profit taking in gold, but the upward trend is expected to continue and gold could test $1,850 over the next several days.

Operational Notes:

1. CPM strives to try to make these Trade Recommendations as close to its own preferred trading strategies as possible. This is complicated by the gulf between our preferred method of mixing physical, futures, forwards, and options on the one hand and some distributors of these Recommendations focusing solely on spot purchases and sales. We continue to work to bring the two strategic postures into closer alignment.

2. If CPM issues a Recommendation pointing to higher or lower prices over a given period of time and does not issue a subsequent new Recommendation during or after that time period, it should be taken to indicate that CPM is maintaining the buy, sell, or stand aside posture in the most recent Trade Recommendation.

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.