These trade recommendations are brought to you by CPM Group. Due to market conditions, the views and positions of trade recommendations can quickly change. We strongly advise you to monitor our published trade recommendations on an ongoing basis.
Gold prices had been trading in a narrow range of $1,765 – $1,795 / £40.80 – £41.49 ($1,770 – $1,800 / £40.91 – £41.60) since around 17 June. This morning gold broke above that range, running to $1,815.70 / £41.97. By afternoon the thrill was gone and gold subsided back to $1,795.80 / £41.51. CPM’s weekly video on Friday 2 July focused on a thesis that gold and silver prices (a) have been trading in relatively narrow, unvolatile, trading ranges for several weeks during June, but (b) seemed likely to be more volatile in July, possibly moving both sharply lower and sharply higher over the next four weeks.
Potential For Increased Volatility In Gold and Silver, CPM 2 July 2021. Markets got a taste of this on 6 July. That said, the move above $1,800 / £41.60 was predicated on the OPEC divisions, a consequent upward move in oil prices – which corrected sharply lower later that day, and concerns about the U.S. equity markets. The dollar showed mixed performance, but rose both with gold and then later during the day rose further as gold gave up half of its winnings. CPM would not be surprised to see gold drop to $1,780 in the next eight trading days. It might even test that support around $1,770 – $1,765 / £40.91 – £40.80. Later in July CPM expects gold prices to strengthen, but the softness in today’s brief rally suggests softness for the next few trading days.
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.
USD/GBP exchange rate used: 0.72