CPM Gold Trade Recommendation
Time Stamp
Prices as of 2:17 p.m. EDT 15 April 2024 $2,381.30 (Basis the June 2024 Comex contract
Recommendation: Sell
Initial Target Price / Range: $2,300
Initial Timeframe: 15 April 2024 to 29 April 2024
Gold prices reached a record $2,448.80 on Friday 12 April. Prices have since retreated around $80. It would not be surprising to see gold make another $80 to $100 decline or more over the next week or two weeks.
Prices at current levels are more overbought than they were at the start of the month, when gold had firmly topped $2,300. Prices have risen on solid concerns in general about the financial markets, the economy and the political environment. However, fundamentally the world is not in as dire conditions as to keep prices elevated at current levels. The world economy overall remains in positive GDP territory, with the United States economy surprisingly faring better than had been expected. Inflation is at more manageable levels than last year, with U.S. Headline CPI down from a peak of 9% to around 3.5%. Political friction has escalated, but major oil exporters and other nations clearly do not want an all out war between Iran on one side and Israel and possibly the United States on the other side.
This all said, there remains potential for prices to still move higher. CPM has been projecting such further price increases for the second half of 2024 and into 2025. This still is our expectation. Over the next five months there is scope for prices to decline modestly to still high levels and consolidate. The unsettled political environment could preclude such a consolidation period, but CPM’s main projection at this time is that it will not.
Further upward moves, sooner or later, are expected to be based on another speculative round of buying, and an increase of political tensions, notably in the Middle East and between Russia and Ukraine. However, in our main scenario based view, the potential for another price spike higher in the next two weeks diminishes daily and there is an increased chance of prices spiking lower. If prices do not decline quickly then they will likely decline gradually, over the course of a month or two, into the Summer months. An initial support level would be considered to be around $2,300 with $2,250 following shortly thereafter.
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.
