Trade Recommendation 4th January 2021

Timestamp (GMT)
4th Jan 2021 14:15 £46.22g
Direction
Hold
Target Price / Range
£46.80g
Timeframe
5th - 20th Jan 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 was at $1,886.10(oz) / £44.81(g) on 21 December, the date of CPM’s previous Trade Recommendation. We said to buy gold as a short-term investor with an initial target of $1,910 / £45.37. We also have been writing for some time that we expected that prices could jump as high as $2,000(oz) / £47.51(g) in January or February, before falling back.

Gold rose about $50 / £1.19 this morning, 4 January. It rose in line with stocks, oil, other commodities.

We still expect gold prices to rise further in the next two to six weeks, and $2,000(oz) / £47.51(g) may be a reasonable objective. Political developments in the United States over the next two or three days will weigh importantly on gold and other financial asset markets.

That said, with prices $50 / £1.19 higher in one day, the idea of a short-term pull back, to $1,900(oz) / £45.14(g) or some other level, may well be realized.

Our advice to our investor clients would be to hold on to their gold, not take profits, but to buy shorter dated put options to protect against a short-term drop back in prices, and to profit from such. If prices dropped $50 / £1.19 the puts could be sold back to the market, a nice profit would have been generated, and the investor would still be long physical gold.

Note: 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.

US$/GBP exchange rate used: 0.74