CPM Trade Signal - May 2, 2022
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Featuring views and opinions written by market professionals, not staff journalists.
Prices as of 2:14 p.m. EDT Comex close, 2 May 2022 $1,862.00 (Basis the June 2022 Comex Contract).
Recommendation: Stand Aside
Initial Target Price / Range: $1,825 - $1,925
Initial Timeframe: 3 May 2022 to 13 May 2022
Gold prices have been hit hard over the past six trading days, along with other precious metals, other commodities, stocks, and bonds. The prospects of a 0.5% increase in the Fed Funds rate on Wednesday 4 May has been the primary catalyst for the sell off across financial markets.
This week will be particularly treacherous for all financial markets. First, the FOMC meeting and subsequent interest rate increase poses a downward threat for all financial asset prices. The consensus, fueled Fed comments, has become that a 0.5% increase now is more likely than the 0.25% increase anticipate prior to last week. The weaker than expected -1.4% first quarter contraction in U.S. real GDP announced last Friday may shift the Fed’s policy back toward 0.25%.
The second factor that could move gold and other assets sharply lower or higher is the likelihood that both Russian and Ukraine will launch major offensives attacks this week, in advance of the 9 May eastern European memorial day for Victory in Europe, next Monday. Russia had been attempting to score major victories in eastern Ukraine in advance of 9 May. It still may try. Ukraine however has launched a major counter-offence in advance of that, striking Russian forces in Russia, eastern Ukraine, and the Black Sea. Russia continues to try to pull the U.S. and NATO into a direct military conflict. All of this could be unsettling for markets.
CPM would stand aside from short term positions for now, waiting until gold rises above $1,900 or $1,915 before re-establishing long positions.
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 email@example.com for details.
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.