Trade Recommendation 3rd August 2020

CPM Group

Commodities Research

Timestamp (GMT)
3rd August 15:37 £49.14
Direction
Sell
Target Price / Range
£48.45
Timeframe
3 - 7 August 2020

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.

On 27 July CPM recommended that all but the most agile and brave investors stand aside for a week in gold. Gold was $1,931 / £47.73. We suggested it might trade between $1,900 / £46.97 and $1,960 / £48.45 last week, before coming off a bit in early August. Prices traded between $1,899 / £46.94 and $2,008 / £49.64.

Gold is $1,987.90 / £49.14 this morning. CPM would sell gold with an initial target of $1,960/ £48.45.Further declines to $1,950 / £48.20 or even $1,930 / £47.71 cannot be ruled out, especially if progress on a second round of U.S. government funding is reported in the next few days.

Economic and political uncertainties can keep gold prices high, but prices rose sharply last week on the August Comex roll as well as these political and economic uncertainties.

There is scope for some decline in prices before they rise further.

Chinese regulators are trying to cool down speculative demand, which was very strong last week. Chinese investors lost an estimated US$1 billion in the Nymex oil debacle two months ago, and Chinese banks, brokers, exchanges, and regulators would like to help protect Chinese speculative investors from losing much more money if gold and silver fall sharply after the August gold and September silver contracts roll forward.

Meanwhile the Comex August roll is behind the market. The dollar and yield on the 10-year U.S. bond dropped a good amount last week, but both assets are showing some signs of either slowing any further decline or reversing the declines on a short-term basis.

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

US$/GBP exchange rate used: 0.77

 

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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.