CPM Trade Signal - Nov. 29, 2021
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Prices as of 4:25 p.m. EDT (121h25 GMT) 29 November 2021 $1,784.90 (Basis the February 2022 Comex Contract).
Direction: Stand Aside
Initial Target Price / Range: $1,760 - $1,850
Initial Timeframe: 30 November to 10 December 2021
CPM is maintaining its Stand Aside short term trade recommendation for gold. It is issuing this Trade Recommendation to shift to the now-active February 2022 contract from the December contract, which is now the spot deliverable contract on Comex. Additionally, given the wild gyratiions in markets on Friday 26 November, following the release of various governments’ notices related to the newly identify Omicron variant of the Covid-19 virus, a review of the reasons to maintain the Stand Aside posture seemed warranted.
The Omicron announcement sent U.S. and other equity markets sharply lower, along with petroleum prices, Treasury interest rates, and some currencies. Gold prices initially rose but then backed off. Gold remained within its recent trading range for most of Friday, 26 November, and continued in that line on Monday, 29 November. Gold showed periods of strength but also moved to test technical support just above $1,780.
Gold remains vulnerable to another spike down, with an initial target of $1,760. The December to February Comex roll is largely complete, with 482,620 ounces of December open interest remaining to be resolved as of Monday morning. With the December roll behind the market, some price support disappears. Meanwhile, the initial shock of the Omicron variant seems likely to dissipate relatively quickly. Overall economic trends remain strong in many regions. In the U.S. recent payroll levels, unemployment rates, consumer spending, housing starts, home sales and housing prices, and other economic measures are reaffirming economic recovery.
CPM continues to advise spot investors to stand aside and 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.
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.