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CPM Trade Signal - May 25, 2023

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CPM Gold Trade Recommendation

Time Stamp

Prices as of 11:43 a.m. EST 25 May 2023 $1,945.30 (Basis the June 2023 Comex contract).

Recommendation: Sell

Initial Target Price / Range: $1,920

Initial Timeframe: 25 May 2023 to 9 June 2023

Gold prices have broken below CPM Group’s previous sell recommendation, with a price target of $1,950. Prices are expected to continue on this downward trend in the near term. First quarter U.S. GDP was revised higher, and jobs and inflation data still warrant tighter monetary conditions. Economic conditions are healthier than markets were expecting, and markets are now pricing in more monetary policy tightness, which should weigh on gold prices. Seasonally prices tend to soften as markets move into the summer months, which should act as another reason for softer prices in the near term.

Prices could still find some support from the unresolved debt ceiling debate, but the broad market sentiment is tilted toward an eleventh-hour resolution.

There are several possible scenarios for what happens with the debt ceiling debate. Five of them are listed below. CPM Group’s probabilities in red and parentheses.

  1. An agreement is reached (60%)
  2. Biden uses some of the many instruments available to the Administration to continue funding (including gold sales) (10%)
  3. Biden invokes the Constitution and demands Congress stay in session until the issue is resolved (see below, re Article II, Section 3 of the Constitution (10%)
  4. Biden invokes the 14th Amendment and either raises the debt ceiling or abolishes that legislative mandate (5%)
  5. The government defaults. (15%)

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.

By

CPM Group

Contributing to kitco.com

Contact info@cpmgroup.com
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.