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What does one do when wanting to buy gold to guard against political dysfunction and potential violence, but prices already are near record levels?

CPM has had “Stand Aside” ultra short term recommendations for gold and silver for several weeks now, and recently had added similar ultra short-term recommendations for platinum and palladium. Although these ultra short term recommendations changed today for silver, platinum, and palladium, CPM is maintaining its Stand Aside for gold. It is assumed that those reading and listening to CPM have long positions which they are maintaining. CPM is merely suggesting to investors that buy and sell on a shorter term basis that they may not want to buy at present near-record levels, but may want to buy on dips.

Gold has risen to record levels at the high end of our projected range. Silver has traded over $30 but has since fallen back below $29. Platinum and palladium prices have bounced around within our projected ranges.

CPM is not particularly keen to have Stand Aside recommendations for such long periods of time, but the current volatility and the fact that prices for gold at least have been at the high end of our projected price range have led us to maintain this position for gold.

CPM’s assumption is that people who read CPM publications and media have a core long position in gold. We have been recommending investors hold those long positions since 2013, but now are suggesting that investors should not add to them at record levels.

There is scope for lower prices in the very short term, but given the surge in uncertainty about the political environment around the world as well as in the U.S. Presidential and Congressional elections the overriding direction in the final four months of 2024 and in 2025 is for higher prices. What happens in politics is nearly impossible to predict, which is partly or some would say mainly the reason why gold prices have been rising to record highs over the past several years.

There also is concern about the financial and economic landscape. Later this week there will be data that may provide some indications of the direction of the U.S. economy and the potential for firmer direction on where interest rates may be headed, the potential pace of reductions.

While we do not like to issue Stand Aside recommendations, it seems to be the prudent thing to advise for short term gold investors at present. Our Stand Aside recommendation is not to suggest disposing of longer term positions, but also not to be adding to these positions necessarily at current record prices. We do not believe it is the time to chase prices higher. Prices should and will eventually retreat, which may present a buying opportunity. This could happen over the course of September.

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Courtesy of the CPM Group