Contributed Commentaries
CPM Trade Signal - Feb. 17, 2022
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Time Stamp
Prices as of 9:35 a.m. EDT 17 February 2022 $1,894.00 (Basis the April 2022 Comex Contract).
Recommendation: Buy
Initial Target Price / Range: $1,910 - $1,920
Initial Timeframe: 18 February 2022 to 23 February 2022
Gold touched $1,900 in morning trading 17 February, on concerns or expectations of an imminent Russian invasion into Ukraine. While the probabililty of an invasion seems more than 50% the outcome of the Russian belligerence remains undetermined and unknown.
It would not be wise to be short gold in this environment, and further price increases should be anticipated. Thus the long recommendation. Interestingly, investors have been net sellers of ETFs as gold prices rose the past few days. U.S. Mint gold and silver coin sales to dealers also have not risen sharply in recent days.
There are three sets of outcomes for the Russian belligerence.
- Russia invades
- Russia backs off in response to diplomatic efforts
- The stand off continues.
The first suggests higher gold prices in the next few days. The second suggests a sharp decline in gold prices. The third suggests a pull back to somewhat higher levels.
CPM would advise its short-term investor clients to be long gold at present with a put in place to protect against scenarios 2 and 3. The put might be paid for with a call spread.
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.
While short-term trade recommendations provide high risk – high reward opportunities for investors, it is difficult to capture the complex web of factors affecting precious metals prices and the nuanced CPM analyses of these factors that goes into our firm’s price projections. In addition to these short-term outlooks, CPM Group provides clients enhanced trade recommendations that include one and three month price projections, as part of our Retail Investor Program. Contact CPM at info@cpmgroup.com for details.
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.
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