Trade Recommendation 9th August 2021

Timestamp (GMT)
9th Aug 2021 13:55 £40.27
Direction
Hold
Target Price / Range
£38.83g - £41.37g
Timeframe
9th-13th August 2021

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 began selling off Friday in New York trading, following a very strong U.S. jobs report, the resolution of the August Comex contract forward roll, and a general view that economic conditions were better than financial market consensus had held recently.  

Prices sold off to close around $1,763.40 / £40.76 on Friday trading. When Asian markets opened up Monday a wave of selling plunged gold to $1,672.80 / £38.66, close to the $1,680 / £38.83 CPM has been projecting for an August sell-off low. Stop-loss selling as well as fresh short selling appears to have been involved. The data are not available but there appears to have been hundreds of sellers, responding to the technical sell signal of gold dropping and settling below $1,780 / £41.14 and other nearby technical support/sales signal levels on Friday.  

Gold prices recovered in early Monday New York trading, hovering above $1,740 / £40.22, Gold may recover further in the next couple of days, but remains vulnerable to further weakness and another sell-off over the course of August and possibly into September. From a longer term perspective current levels may be a good buying opportunity. From a shorter term perspective, prices remain vulnerable. Any price breaks above resistance levels could spark buying, but the short-term impetus is for lower prices. Thus, price breaks below recent support levels could spark selling. Short term investors may want to stand aside at $1,740 / £40.22 for a couple of days but  look  to go short after prices recover to around $1,770 – $1,790 / £40.91 – £41.37.  

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. US$/GBP exchange rate used: 0.72