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 have been moving in a mostly sideways fashion (with a technical pennant forming) over the past couple of weeks and are vulnerable at this time to a sharp move higher or lower. CPM Group’s bias is for gold prices to move higher over the next period of time. However, on a short term basis prices could move $25 in either direction over the next few days.
On the upside gold prices have initial resistance at $1,585/ £39.24. If prices are able to settle above this level, prices could rise toward $1,600/ £39.61 or higher. On the downside initial support for prices is positioned at $1,560/ £38.62 which if broken could result in prices slipping back to $1,550/ £38.37.
Gold’s role as a portfolio diversifier is in play at this time, with investors keeping gold at elevated levels despite – or maybe exactly because – equity markets reaching record high levels. There is still a fair bit of uncertainty surrounding the coronavirus, which should keep gold prices range bound at elevated levels in the near term. Any definitive clarity on the spread and economic impact could be weeks away. The U.S. fiscal 2021 budget proposal released Monday 10 February also will focus markets on the U.S. government’s on-going issues with division and a lack of credibility, while the U.S. political process also will lend support to investors’ interest in gold.
Note: Discretion should be allowed at +/- $0.50 / £0.01 from the target.