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Time Stamp
Prices as of 12.04 p.m. EDT Comex 23 June 2022 $1,834.80 (Basis the August 2022 Comex Contract).
Recommendation: Sell
Initial Target Price / Range: $1,810
Initial Timeframe: 23 June 2022 to 8 July 2022
CPM expects gold prices to remain under downside pressure over the next two weeks, and over the next two months. In this environment we are maintaining our Sell signal with an $1,810 downside target issued last week when gold was $1,830. Beyond $1,810 gold is expected to weaken further over the near term, with $1,800 and lower targets.
Market concensus has been torn between inflation and recession, but increased clarity is coming. The Fed Chairman’s Humphrey Hawkins testimony has helped clarify things. CPM’s video Friday will focus on the economic environment, if market events do not pre-empt that discussion.
Recession seems most likely to be avoided over the next few quarters, and the broader markets are moving toward that view. Economic growth will slow, but does not seem likely to slip into recession for a few quarters. There is ample slack in the economy to allow the Fed to raise interest rates from very low levels to still-low levels in its inflation fight without throwing the world or the U.S. into a recession. Inflation measured year over year will show lower growth rates while prices remain high over the next few months. With higher interest rates, lower inflation, and a reduced fear of economic recession, gold as a risk haven asset may lose some support for higher prices during the seasonally weak July and August period.
Risks remain in the economy, financial markets, and political systems worldwide. These risks will keep prices from falling sharply, but the momentum in the next two weeks appears to remain to the downside.
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.
