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CPM Trade Signal - November 3, 2022

Commentaries & Views

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Time Stamp

Prices as of 10:45 a.m. EDT 3 November 2022 $1,625.80 (Basis the December 2022 Comex contract).

Recommendation: Stand Aside

Initial Target Price / Range: $1,600 - $1,650

Initial Timeframe: 3 November 2022 to 18 November 2022

Gold prices have fallen to levels not seen since March 2020. Prices dropped yesterday following the Fed’s move to increase interest rates and Fed comments. Prices bottomed out at a low of $1,618.30 today before recovering modestly. It is unclear in the short term where prices might move toward. Technically prices appear to be weak, but fundamentally there is support for gold given all of the financial, economic, and political turmoil occurring in the near term.

Inflation is high but it is not leading investors to rush to buy gold and silver at this point, and drive metals prices sharply higher. This may be because investors look at the high inflation levels and listen to the Fed and other central banks and see that the major consequence of higher inflation is higher interest rates, lower economic growth, and ultimately lower inflation later. This would suggest lower consumer prices in the long run. This is not occurring immediately, however. In the interim there will be a volatile adjustment period.

The Fed is more likely to succeed than fail in lowering inflation levels, and it may avoid triggering a recession. A recession is possible, probable, at some point in the next two or three years, but probably not due to higher interest rates. A recession may be caused by fundamental supply and demand imbalances across most sectors of the economy, fiscal imbalances, and private and public debt levels, which continue to deteriorate. Interest rates already are higher than had been expected six months ago and may stay at these higher levels for longer than expected, too, weighing on gold, but also suggesting financial and economic problems stay longer than expected as well, which is supportive of gold prices.

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 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.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.