CPM Trade Signal - July 15, 2021
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Prices as of 12:10 p.m. EDT (17h10 GMT) 15 July 2021 $1,826.60 (Basis the August 2021 Comex Contract).
Initial Target Price/ Range: $1,840
Initial Timeframe: 15 July 2021 to 30 July 2021
CPM issued a Sell recommendation for gold a week ago, on 8 July, when gold was at $1,816.90, expecting the short-term rise in prices then three days old would pause at $1,820 and prices would back down. Gold remained below $1,820 until 14 July, when it broke higher. It touched $1,835.00 this morning. Last Thursday’s Trade Recommendation stated that “If prices break forcefully above $1,820 - $1,824 there could be a wave of stop-loss buying and fresh long buying that could take prices sharply higher.” This has happened, and some further increase is possible.
There is short-term upward pressure that could take gold to $1,840, $1,850, or even $1,860. That said, prices just as easily could fall back. CPM had a slightly longer term view of gold prices, which it still maintains. That view was that gold might rise in the last two weeks of July as the August gold Comex futures contracts are bought back and rolled forward. That is still possible. As of 14 July there were 28.8 million ounces of August futures to roll forward. This move could take gold sharply higher.
This Trade Recommendation has an initial target for this period of $1,840, but gold price activity in July 2019 and July 2020 suggests that prices could rise further.
Last year gold rose from an intraday low of $1,690.30 on 3 June to a record $2,078 on 7 August, before falling back sharply over the next three trading days. The primarily upward pressure last July was due to the August Comex roll; once that roll was completed in early August prices dropped back to $1,865 in three days.
Interestingly, the August roll is going primarily into December, rather than the next active October contract. This indicates that shorts on the Comex expect prices to remain stronger over the next two months.
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.