In this episode of Palisades Gold Radio, host Tom Bodrovics speaks with Jeff Christian, Managing Partner of CPM Group. Jeff discusses his background and what brought about the creation of the CPM Group.
CPM Group's research department was established in the late 1960s to gather data and estimate supply and demand for gold and silver as the gold standard was ending and silver was being removed from coinage and currency systems. The company has a strong track record of accurately projecting prices due to their continuous gathering of data and maintaining a global network of contacts.
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Jeff discusses the recent demand for gold from investors has been high, with net investment demand for physical gold totaling 25, 26, and 24 million ounces in the last three years. This level of demand tends to cause an increase in gold prices, as seen by record annual average gold prices every year for the past four years. The price of gold has increased significantly since 2000 and is expected to continue to rise in 2024 and 2025 due to several macroeconomic drivers.
Despite inflation coming down and interest rates rising, investment demand for gold remains strong. Governments and central banks are buying gold to diversify their reserves and reduce reliance on the US dollar. China, in particular, has a growing appetite for gold due to centuries of political disunion and civil wars, making the yellow metal a safe haven for them.
Jeff discusses the impact of The Shanghai Gold Exchange in taking some market share from London, with Chinese investors paying higher premiums for gold compared to the West. The Chinese currency's lack of free trade also affects gold prices in the country. While some gold has moved to China, there are still multiples of the amount of gold built up in Switzerland over the last 10-20 years.
The amount of gold being mined is down somewhat from its peak due to reduced exploration and development spending during a period of lower gold prices. However, higher gold prices in recent years have led to an increase in investment in exploration and development. The capital markets tend to be short-term and cyclical, which can create challenges for long-term financing needs in the industry.
Lastly, Jeff discusses the lack of interest from investors and speculators in gold miners is due to a range of issues, including changes in the equity markets and institutional investment practices. The gap between the performance of smaller companies and large companies has never been wider, making it more challenging for smaller mining companies to access capital.
Time Stamp References:
0:00 - Introduction
0:30 - CME Research History
7:18 - Recent Gold Demand
10:10 - Main Macro Drivers
12:48 - CME Gold Outlook
17:44 - Fed Rates Normalizing?
20:12 - U.S. Debt Servicing
29:16 - Dollar & Euro Demand
31:38 - Dot Plots & Projections
33:10 - Gold & Election Uncertainty
36:48 - Media Narrative Divide
38:40 - Impact of Bitcoin
40:30 - Demand During Crisis?
44:42 - Lower Rates & Gold?
47:34 - China & Gold
50:55 - Shanghai & Pricing
54:14 - Production & Demand
55:20 - Miners CapEx & Supply
59:58 - Silver's Role
1:01:02 - Strategic Role?
1:04:15 - CBDCs & Hyperinflation
1:10:32 - Wrap Up
Talking Points From This Episode
- CPM Group's gold research spans 30+ years, providing unbiased data & analysis.
- Outlook for gold through 2024/2025 and why demand remains high.
- Thoughts on the Dollar, Treasuries and the long-term debt of the United States.
Guest Links
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Website: [ Ссылка ]
Questions Email: info@cpmgroup.com
YouTube Link: [ Ссылка ]
Jeffrey Christian is the Managing Partner of the CPM Group. He is considered one of the most knowledgeable experts on precious metals markets, commodities in general, and financial engineering, using options for hedging and investing purposes. He is the author of Commodities Rising 2006.
Jeffrey Christian has been a prominent analyst and advisor on precious metals and commodities markets since the 1970s, with work spanning precious metals, energy markets, base metals, agricultural markets, and economic analysis. The company was founded in 1986, spinning off the Commodities Research Group from Goldman, Sachs & Co and its commodities trading arm, J. Aron & Company.
He has advised many of the world's largest corporations and institutional investors on managing their commodities price and market exposures and providing advisory services to the World Bank, United Nations, International Monetary Fund, and numerous governments.
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