CPM Trade Signal - Jan. 27, 2022
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Featuring views and opinions written by market professionals, not staff journalists.
Prices as of 11:50 a.m. EDT 27 January 2022 $1,803.20 (Basis the February 2022 Comex Contract).
Recommendation: Stand Aside
Initial Target Price / Range: $1,795- $1,815
Initial Timeframe: 27 January 2022 to 4 February 2022
Gold prices have succumbed to financial market concerns over the Fed’s interest rate policy changes, enunciated this week. While the interest rate policy changes have been expected all along and actually do not bear particularly negative implications for gold, the immediate financial market response was to sell off long gold positions that had been being rebuilt in recent months.
Really short term investors may wish to stand aside for a week or so to see if the gold price stabilizes in the $1,795 - $1,815 range. Prices remain vulnerable to further weakness. Investors may not wish to go long again until prices stop falling. If prices settle below $1,795 there is a possibility that prices fall toward $1,785 or even $1,780.
Longer term, beyond the next week or two, gold prices at current levels seem to represent good buying opportunities. Prices should be expected to recover quickly after they stabilize.
One-Month Price Range: $1,780 - $1,850
Gold prices appear most likely to remain vulnerable over the course of February. A spike to test $1,780 is highly possible as financial markets assess economic prospects in the context of a new interest rate policy posture. Technical factors meanwhile could push gold back toward $1,850, coupled with concerns over the Russian troops massed on the Ukraine border in the context of Russia’s actual policy objectives in moving the troops there.
Three-Month Price Range: $1,750 - $1,860
Gold may remain vulnerable to further weakness in March and April. Investors are expected to become less concerned about economic weakness as expansions continue even in the face of higher nominal interest rates.
CPM has one-month, three-month ranges and eight-quarter quarterly price projections with greater discussion of the factors behind CPM’s analyses provided in CPM’s monthly subscription service, the Precious Metals Advisory.
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.