CPM Trade Signal - September 21, 2022
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Prices as of 3:57 p.m. EDT Comex 21 September 2022 $1,680.50 (Basis the December 2022 Comex Contract).
Initial Target Price / Range: $1,700
Initial Timeframe: 21 September 2022 to 30 September 2022
The Federal Reserve raised interest rates today by 75 basis points in response to persistent high inflation. Gold prices initially dropped to an intraday low of $1,661.30 before recovering following the rate hike decision. Prices reached $1,696.90 on the spike from the intraday low.
There seems to be a growing consensus view that the Fed is at or near peak hawkishness, fostered by the Fed’s own commentaries. CPM’s view is in line with the consensus view that there may be 25 basis point increases in November and again in December, followed by no further increases in the first five months of 2023, followed then by lowering of the Fed Funds rate possibly starting around June. This interest rate trajectory is in line with CPM’s projected arc of weakening economic conditions.
Gold prices may also be buoyed in the next week or two by Mr. Putin’s escalation of Russia’s invasion of Ukraine, including thinly veiled threats of using tactical nuclear weapons. Mr. Putin called up 300,000 reservists to the military (which actually may be more than Russia has). These moves could help push gold higher in the near term, although a domestic Russia backlash could lead to changes in the Russian military strategy that could alleviate some world tensions and lead to a temporary decline in gold prices as a consequence.
Additionally, gold prices have technically held up and many investors appear to be bargain buying. Gold prices could test $1,700 this week and aim for higher resistance levels shortly after.
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 firstname.lastname@example.org 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 maintains the posture in the most recent Trade Recommendation.
Position may be closed out once target price is reached, within the noted discretion or until CPM provides new trade recommendation. CPM may have reported to have closed out of prior trade recommendation at its discretion before publicly publishing new trade recommendation due to processing time.
Discretion should be allowed at +/- 0.20% of the price at the time each TR is issued from the target.
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.