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.
CPM’s most recent Gold Trade Recommendation on 15 July suggested that gold, then trading at $1,826.60 / £42.22, might be weak for the next several trading days but could rise as high as $1,840 / £42.53 in the final trading days of July, as the FOMC meeting would be behind the market and the August Comex gold futures contract’s open interest was rolled forward into December and to a lesser extent October positions.
Gold rose to $1,832.80 / £42.36 Thursday morning, 29 July. It may have a bit further to go over the next two or three trading days, but after the roll, CPM expects gold prices to decline during August. Initially prices may trade to $1,800 / £41.60, then $1,780 / £41.14, with the potential for deeper declines as the month progresses.
Investment demand has been relatively weak in recent weeks. While lower U.S. interest rates and affirmations of monetary accommodation in the short term support higher gold prices, stale bull liquidation of long gold positions by investors who expected sharply higher inflation and gold prices continues to weigh on the market while other investors continue to focus on stocks and bonds.
Gold price weakness could extend through August into September. We will be watching.
Notes: Initial Target Prices and Timeframes are just that: Initial. If CPM does not issue a new Recommendation during or after that time it indicates that CPM is maintain the posture in the most recent Trade Recommendation. Discretion should be allowed at +/- 0.20% of the price at the time each TR is issued from the target. Recommendations are valid until the target date or a new Trade Recommendation or message is issued by CPM. CPM’s preferred investment strategies use physical, futures, forwards, and options. US$/GBP exchange rate used: 0.72