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CPM Trade Signal - Nov. 23, 2021

Commentaries & Views

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Time Stamp
Prices as of 12:20 p.m. EDT (17h20 GMT) 23 November 2021 $1,788.40 (Basis the December 2021 Comex Contract).

Direction: Stand Aside

Initial Target Price / Range: $1,760 - $1,840

Initial Timeframe:24 November to 3 December 2021


Gold prices plunged sharply in the first two trading days of this week, from a high of $1,850 on Monday morning to as low as $1,783.90 on Tuesday afternoon, 23 November. Gold prices actually began declining last Friday.

Gold’s decline has been in line with sharp decreases in stocks and a wide range of other commodities, as well as increases in bond yields and the U.S. dollar’s exchange rate. The shifts began at the end of last week, reflecting financial markets’ re-evaluation of the strength of economic growth in the Untied States and other countries, and the potential likelihood that the Fed and other monetary authorities would be raising interest rates more and sooner than had been expected earlier in the face of such stronger than expected economic activity and rising inflationary pressures. The re-nomination of Jerome Powell on Monday, supported by both Democrat and Republican members of Congress, reinforced the view that interest rates might rise sooner, perhaps starting in the middle of 2022.

While CPM maintains its posture that gold prices are likely to rise in the longer term, it also is maintaining its stated view that prices could remain relatively range bound in the short term and rise only modestly over the next six to eight quarters.

Gold, and other commodities, remain vulnerable to further short-term price declines, although they appear close to stronger technical support around $1,760.

CPM would advise spot investors to stand aside to wait for signs of prices stabilizing around a base before buying or re-establishing long positions on a move above $1,800. It would advise options based investors to consider call straddles.

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.