CPM Gold Trade Recommendation
Time Stamp
Prices as of 11:43 a.m. EST 2 February 2024 $2,051.90 (Basis the April 2024 Comex contract).
Recommendation: Sell
Initial Target Price / Range: $2,030
Initial Timeframe: 2 February 2024 to 16 February 2024
Gold prices bottomed out at $2,004 on 25 January. Prices rose from there to peak at an intraday high of $2,083.20 yesterday. Today, prices came off sharply on better than expected employment figures for the United States. This report suggests reduced concerns about the strength of the overall U.S. economy. The roll of the February Comex contract into future contracts also is nearing completion, likely removing support for prices. The bulk of the roll’s impact already is behind the market. The U.S. dollar has recently been moving sideways while U.S. yields have moved lower, providing some support for gold, although bond yields did move higher today. Concerns about the overall economic and political situation around the world will help keep gold prices from declining too much, especially with the recent increase in banking sector stress and a U.S. presidential election later this year. The concerns are middle term, however: For now economic conditions are good. The concerns focus on risks that could emerge later this year. Gold prices also should get some support from the Chinese Lunar New Year next week. This said, the next two weeks appear to be a respite and gold could test $2,030 or lower.
One-Month Price Range: $1,940 - $2,155
Seasonal strength in prices and expectations of lower interest rates is expected to keep gold prices supported in the near term.
Three-Month Price Range: $1,925 - $2,200
Fading seasonal weakness coupled with market concerns about the potential of one of the numerous political risks or macroeconomic risks to precipitate an economic downturn is expected to be 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.
