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CPM Group Trade Signal - May 28, 2021

Commentaries & Views

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Time Stamp
Prices as of 10:42 a.m. EDT (15h42 GMT) 28 May 2021 $1,892.80 (Basis the August 2021 Comex Contract).

Direction: Sell

Initial Target Price / Range: $1,880

Initial Timeframe: 28 May 2021 to 11 June 2021


As mentioned in yesterday’s Trade Recommendation, gold has risen above $1,900 in recent days. It is off some today.

CPM expects gold prices to soften somewhat in the extremely short term of the next week or two. We see initial support around $1,880, with further support around $1,875. Additional weakness could take prices lower, possibly to $1,850, over the course of June.

July may see strengthening gold prices into the first trading days of August, as was the case in 2019 and 2020. The roll of the August Comex gold contract into forward months may be a major force in July. As of 27 May, August open interest stood at 38.6 million ounces. Prices could rise to test $1,920 in July.

The increase in general price inflation continues to look transitory, reflecting the re-opening of economies in the face of massive fiscal and monetary stimuli. Prospects are for more inflation expectations pushing gold and silver prices higher. These expectations may be misplaced but that would not stop investors from buying precious metals based on such expectations.

The U.S. dollar and Treasury interest rate likely to experience increased volatility, pushing gold and silver prices around with an upward bias.

Notes:

Initial Target Prices and Timeframes are just that: Initial. If CPM does not issue a new Recommendation during or after that time it indicates that CPM is maintain the posture in the most recent Trade Recommendation.

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.

CPM’s preferred investment strategies use physical, futures, forwards, and options.


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.