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Time Stamp
Prices as of 12:02 p.m. EST 5 May 2023 $2,021.20 (Basis the June 2023 Comex contract).
Recommendation: Sell
Initial Target Price / Range: $1,980
Initial Timeframe: 5 May 2023 to 12 May 2023
Gold prices reached a record Comex intraday high $2,085.40 yesterday, 4 May, topping the previous record of $2,078.80 set last year in March. Gold settled at $2,055.70 that day, down $29.70 from the morning’s high. Today prices are off sharply, having bottomed out at $2,007 at the time this Trade Recommendation was being written.
The volatility in the gold market appears to be influenced by a swath of market views, mixed and changing sentiment about the economy, the Fed’s comments about its monetary policy path, and economic data, which has been deviating from market expectations in recent months. All of this is causing increased volatility, and should be expected to continue to cause volatile price moves.
In addition, there could be more developments that could push gold and silver higher or lower in the next couple of weeks, notably the Russian war in Ukraine. Things could develop quickly against Russia, within Russia and in the warzone, which could be seen as a reduction in international tensions. There has been commentary about the Wagner group pulling out of Bakmut. There also seems to be increased dissent within the hierarchy of Russia’s government, military, and oligarchic society. There seems to be increased sabotage of Russian assets by anti-Putin, anti-war Russian partisans. There also is confusion about the drone attack over the Kremlin.
CPM thinks there is some more short-term downside to gold prices over the next week or so. Beyond that there is scope for gold prices to recover over the next month or so, after support levels are tested once more. This may depend on how markets come to terms with economic data scheduled to be released later this month and if or how much this data deviates from expectations. The debt ceiling impasse also could help prices recover over the course of the next couple of weeks.
Beyond the short term, prices are still expected to head lower between now and September. Recession does not appear imminent and inflation continues to head lower. Seasonality also could weigh on gold prices after May and once the U.S. debt ceiling is raised, eventually resolved by bickering politicians. Longer term, CPM still expects gold prices to rise significantly, possibly starting in late 2023 or early 2024.
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.
CPM Group wants to thank the following companies for helping us make these short Trade Signals available free of charge, and for their commitment to providing good information in opaque and asymmetrical commodities markets.
Kitco
Metallic Minerals
Stillwater Critical Minerals
Granite Creek Copper
