Trade Recommendation 24th July 2020

CPM Group

Commodities Research

Timestamp (GMT)
24th July 16:55 £47.40g
Target Price / Range
27 - 31 July 2020

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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 risen sharply over the past four days, from $1,816 / £45.47 to as high as $1,897 / £47.50. CPM has written about a spike to $1,920 / £48.08, in its early July Precious Metals Advisory. This price seems achievable in the next five days, as the gold market moves toward the first delivery date for the August Comex gold futures contract on Friday 31 July.

As of Thursday 23 July there still were 26.1 million ounces of August futures contracts open. Already 25.1 million ounces of August contracts had been bought back and rolled to December. More than half is yet to come, and the roll may be expected to continue to apply upward pressure on gold prices until it is resolved.

With gold prices up roughly $80/ £2.00 in four days the price obviously is vulnerable to spikes down. The August roll may keep prices from doing that until the first week of August, however.

Global and U.S. economics, political, and financial market imbalances meanwhile will continue to cause investors to want to be long gold. Tellingly, the August roll is mostly into December, and not the next nearby active October contract: Few investors or traders want to be short gold in October, in advance of the U.S. election on 3 November and in the face of looming Brexit, the shift from Libor, and other major transitions.

Note: Discretion should be allowed at +/- $2.00 / £0.05 from the target.

US$/GBP exchange rate used: 0.78

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Important Disclaimer
Past performance is no indication or guarantee of anticipated future profits and neither Goldex nor CPM can accept any liability or responsibility for any loss suffered as a result of gold price fluctuations. Gold as a commodity is not a specified investment for the purpose of giving advice under the Financial Services and Markets Act 2000. Therefore this trade recommendation does not give rise to rights to claim compensation under the Financial Services Compensation Scheme. CPM is a registered CTA with the U.S. NFA and CFTC. At times the principals and associates of CPM may have positions in the precious metals, commodity and equities markets. CPM also manages investment and industrial positions in markets for its clients.