CMX gold price returns performing in line with our view: +10% to +15% NTM
April 15, 2024
Key Observations:
On Friday Apr 12, the prompt CMX gold futures price (GCJ4) closed at $2356 per oz. This level marks an increase of +11.5% from this contract's close one year earlier ($2113, April 12, 2023).
Price gains have been higher in more deferred contracts over the same trailing 12 months, though are consistent with our forecast of 10% to 15% rolling next-twelve-months (NTM) price changes for GC1. Aug-24 (Q4): +11.9%, Dec-24 (Z4): +12.6%, and Apr-25 (J5): +13.2% on an inputed basis given there was no open interest in that contract one year ago.
Before the advance into the current price regime, we expected 6% to 9% rolling NTM returns. Realized returns for 2024-25 futures did fall within that range as recently as last month (e.g., J4 advanced by +7.0% YoY through Mar. 15, 2024).
The Shanghai Gold Exchange Au T+D gold price settled above the equivalent of US$2400 per oz on Apr 9 and 10 and at $2484 on Apr 12 ahead of Iran's expected attack on Israel. There's about $45 of risk premium built in on this Mideast tension. Physical buying in Asia, including by central banks and investors, remains a powerful fundamental driver of the gold rally, among other factors. Our 12M forward target for the J5 contract that will be prompt one year from now is $2650 per oz.
Source: Bloomberg, CMX, Blacklight Research.
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