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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 reached multi-year highs amid rising tensions between the U.S. and Iran. There are many scenarios that could occur going forward. Price volatility may continue. Leadership from the U.S. and Iran are now confronting each other in terms of positions they are taking or are prepared to take should tensions continue to rise. The uncertainty of the politics involved, not only in the U.S. and Iran, but in Iraq, other countries in the Middle East, and in Europe make it difficult to gauge where prices will go at this point.
In addition, Trump has said that China and the U.S. are to reach a preliminary trade agreement 15 January, a statement not seconded by others in the U.S. government or any Chinese source. While this has buoyed some markets and created positive sentiment about trade and global growth, it remains to be seen if such a meeting and agreement emerge next Wednesday.
A reduction in U.S.-Iranian tensions, or a postponement of retaliation, and/or a positive outcome on the U.S.-Chinese trade front could lead to at least a brief period of profit-taking pushing gold lower.
Should prices fall back sharply, it could prove to be a buying opportunity.
Should tensions continue unabated and gold move above $1,600 per ounce / £39.10 per gram, it might signal re-entry on the long side as well.
Note: Discretion should be allowed at +/- $0.50 / £0.01 from the target.