Contributed Commentaries
CPM Trade Signal - Feb. 24, 2022
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Be the first to know when a new trade signal is out! Click here to sign up for e-mail notifications.
Time Stamp
Prices as of 3:45 p.m. EDT 24 February 2022 $1,895.60 (Basis the April 2022 Comex Contract).
Recommendation: Sell
Initial Target Price / Range: $1,870 initially, $1,860 possible later
Initial Timeframe: 25 February 2022 to 4 March 2022
It would seem impossible to make a short-term buy or sell recommendation for gold on a day when the price rose to $1,976.50 and then fell to $1,878.60, a $98 intraday spread. But that is what we do.
Russia has invaded Ukraine.
The United States and its allies have announced some of the most pathetically ineffectual sanctions and responses imaginable. No one is going to come to the aide of Ukraine. Russia will occupy Ukraine, there will be massive destruction, and Russia will receive a slap on the wrist for doing so. The U.S. and its allies will not cut off Russian oil and gas imports.
Over the next few days the world will adopt the posture that from a short term perspective Ukraine is not all that critical to the world. A Ukraine insurgency will emerge, bogging down the Russian military and distracting the Russian government for as long as they stay in Ukraine. Longer term there will be implications. The dollar wins, the U.S. government and military contractors win, NATO wins. China wins. But short term, it is ‘buy on the rumor and sell on the news.’
Gold prices rose from a range around $1,780 - $1,860 to $1,900 - $1,917 in the run up to the invasion, before spiking higher on the actual invasion. And then gold fell to its lowest level since 17 February.
Further declines are possible in the near term, as markets assess what the full economic and financial impacts will be on global assets. Ultimately, soon, the gold market will refocus on potential interest rate increases, which could be slowed due to the Russian invasion, and inflation, which could be confounded by high oil and gas prices draining disposable income away from other expenditures.
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.
 |
