Gold and Silver Poised for Price Spike, But Pullback Expected- Jeffrey Christian

Gold and Silver Poised for Price Spike, But Pullback Expected- Jeffrey Christian

hey everyone I’m Jeremy saffron this is Kiko news don’t forget to hit that subscribe button for the latest now today on the show we’re tuning into the global economy where central banks are making moves that could shape your investment decisions the European Central Bank and the Bank of Canada have just lowered an interest rates by a quarter percent a clear sign that they’re trying to stimulate their economies meanwhile the US is seeing easing labor costs hinting at a possible slowdown in economic activity so what does these Financial tweaks mean for the future of precious medals are we looking at a renewed rally in gold and silver or are there more to the story here to help us unpack these developments we’re joined by Jeffrey Christian no stranger to our kit audience he’s a managing director of the CPM group and an expert in Precious Metals investing Jeff thanks again for joining us today well thanks for having me I guess yeah of course of course it’s always a pleasure uh you know you heard the intro there we had some interesting economic data coming in and I guess start with that Jeff considering the recent measures including the interest rate cuts by the ECB uh yesterday the Bank of Canada as well as the moderated labor costs in the US how do you evaluate the potential of these Global monetary policies on the stability and the pricing of gold in the international markets and what we’re looking for here well I think you know in Visa the ECB and the Bank of Canada those will suggest slightly higher uh demand for uh for the US dollar uh but they’re also a sign of economic weakening and you know we have been saying for some time that there’s this ill-placed wishfulness oh we we wish the US uh fed would lower interest rates and we’ve been saying for a long time don’t wish for that because the FED will only lower interest rates when it sees significant signs of economic deterioration yeah if the FED is at 5 and a qu% and uh the economy is still humming and there’s still more downward pressure on inflation rates that there are upward pressures on inflation rates the feder will keep interest rates at 5 and a half percent the feder will only lower rates here in the United States when it sees signs of significant deterioration in economic activity now we also have been saying for some time that we expected to see deteriorating economic conditions in the United States as well as in Europe uh Canada Japan and other countries uh over the course of 2024 we are seeing that we are seeing signs of gathering weakness more so in Europe and Canada than in the United States but it is there and so we’re we’re pretty much where we thought we would be uh you know the gold price and silver price are a little bit higher than we thought we’ be but the reality is that you’re seeing a maturing economic expansion uh increased risks of economic slowdown and or even a recession which we’ve been saying was quite possible in the final quarter of this year into 2025 uh you have a tremendous amount of political concerns uh so you put that all together and it suggests stronger investment demand and higher prices for gold and silver so yeah to go back to your question you know the lower interest rates in Bank of Canada and and the EU uh basically are notches in that in that you know it’s a move toward it’s it’s their reinforcements of what we’ve been seeing and what we’ve been expecting uh in a in a way that probably positive at least for the next year or so for gold and silver prices okay interesting so I mean that brings me to the next question you know central banks are adopting this more cautious approach to inflation how sustainable is it you know is this the precursor to a more sustained investment in gold and silver is safe havens and more curiously how do investors interpret this now and what do they do here what are some strategies in response to these Central Bank policies well it’s interesting and you know I’m not quite sure how you define sustainable higher gold and silver prices of yeah we you know we have been saying and we continue to expect gold and silver prices to rise over the next 12 to 24 months but then we expect them to come down and the expectation of prices coming down a you know well we’ll talk about where we think they might come down to if you want uh later you know two years from now uh but more importantly it’s like um what’s sustainable gold prices and silver prices and you know the reality is that you have investors uh especially in Gold have been buying gold silver you’re seeing strong two-way investor activities so you’re seeing uh increased investor buying of silver over the last two months or so as the price has risen but you also have seen increased sales of silver from investors who um have waited too long for $100 silver and they’re saying look I bought it at $30 in 2021 it’s back to $30 please take it let me go do something else yeah a little bit of fatigue there okay before we head over to Silver let’s talk a little bit more about gold just give me your forecast for this year I mean you mentioned over the next 12 24 months we’re going to see the prices go up much like anything in Precious Metals it’s cyclical so those UPS uh you know those high prices might in fact come down but what’s your forecast for the remainder of this year especially going into this election year well we wouldn’t be surprised to see a little bit of weakness over the next couple months in Gold I don’t see prices falling sharply I think what we’re actually telling our clients is that we could see in our mind a reasonable decline down to $2,280 or so price is testing 2,400 today as we speak uh but you know we could see a range over the next three months of say 200 $2,280 on the low end and $2,450 on the high end um little bit of a sort of sideways move downward move during that two three month period into the final four months of this year as you watch the US election unfold and as you have ongoing issues in Russia’s invasion of Ukraine Israel’s attacking Gaza and other International political issues we would expect gold prices to Rise um I’m not quite sure how high they rise uh but you know for a full year average price we could see $2,400 which would suggest significantly higher prices in the second half of this year into 2025 than you have seen in the first half of this year yeah you know you talked a little bit about what’s causing that uh those prices uh what benefit or what to degree does the bricks plus you know Turkey is really increasing their Central Bank buying here I’m curious does anything surprise you about about the Central Bank buying and is that going to sustain itself throughout the US election as well well I’m not sure about bricks buying I think that there’s a lot of misinformation floating around Turkey uh you know if you look at the most recent data for Central Bank activity uh you know China bought a little bit more but Chinese yeah the China was buying like 7 million ounces last year 650,000 ounces a month uh they’re down you know like 150 60,000 ounces a month and that partly reflects the higher price uh People’s Bank of China like many other central banks are very price sensitive at you know $2,200 they were buyers at $2,400 they’re not necessarily buyers the two big buyers in April were Russia which is buying and selling gold month-to month in order to finance its economy and its war effort and turkey and turkey has a traditional role in in the gold market it is uh the big one of the big Market centers for gold in the Middle East uh it also is a country that the economy has been really whipsawed over the last two years now because a lot of goods flow into turkey on their way to Russia to to avoid sanctions other countries will say well we’re not going to ship stuff into Russia okay we’ll ship it into turkey or Kazakhstan or usbekistan and those guys will take it on that does two things first off it increases the need for foreign exchange to pay for all those goods that get trans shipped into Russia but it also is um increasing the wealth of sanction busting people and companies and so you also have stronger demand and higher inflationary pressures within turkey and Kazakhstan and usbekistan and and as a result of that you’re seeing you know those countries um needing foreign exchange uh and turkey actually I think was selling some last year and then they turned around and they’ve been buying some back but you know the Turkish government has a lot of its own problems both domestically and internationally uh and it is uh a traditional store of gold it’s one of two countries that really have monetary policies that are supportive of monetary regulations that are supportive of individuals owning gold uh as effectively as they can and using it uh for monetary purposes I mean turkey allows its commercial Banks to use gold uh to meet some of their reserve requirements that frees up lra in the Turkish market uh and economy and helps turkey have a better more liquid economy and stay out of recession so yeah you know it’s a special case there yeah definitely uh okay well let’s talk about silver I mean you know the Dual role in the market is interesting is both Industrial Metals and a monetary asset uh elaborate on Cur current market conditions here a little bit how are they affecting these two aspects of silver demand well you you have seen strong silver fabrication demand in solar power and in some electronic applications uh and that has come at a time when mine production and secondary recovery total supply has been relatively flat for several years uh it really hasn’t responded to the rise in prices it’s still sort of responding to the fact that from 2013 to 2020 uh the silver price was 15617 an ounce and it was very hard for mining companies to raise capital or even raise debt to finance exploration and and development of New Brownfield or Greenfield uh mining so you’ve got relatively stable Supply you have strong demand in a couple sectors which is really tightening the supply demand balance but you need to think of Supply in three levels and we’ll get back to that the third level is available above ground inventories and as I said earlier you have any number of investors who over the course of 2023 and the first half of 2024 have been selling silver these in many cases are people who bought silver at 30 31 $32 an ounce in 2021 because they drank the Kool-Aid about you know Central Bank digital currencies and conspiracies to manipulate the price and the price is going to 50 or 100 or 750 as one guy in Vancouver kept touting up until last year and the price didn’t do that so a lot of people bought silver at $30 $32 they’ve watched the stock market go to new record levels they’ve missed that they’ve watched corporate bond prices go to new records they missed that and they’re saying okay I’m just going to sell that stuff so what we’ve seen over the last two months is I think I mentioned earlier very active two-way Market in investor buying and selling of silver there are any number of investors who have been disenchanted they’ve been selling silver really for about 15 months now maybe longer there are other investors who watch the price break above that 2628 range and start moving higher and they’ve got an enthusastic oh this is it it’s going to a thousand yeah we know this uh because some guy on the internet told me that and he’s been saying it for 20 years and he’s been wrong but that’s beside the C point now he’s right so you’re seeing some investors buy silver and run into silver and then you’re seeing other investors saying you know I’m just happy to get my $30 an ounce back so you’ve got two-way activ in the Civil market and on the part of investors um and you’ve got to pay attention to the fact that investors you know there’s a what a billion ounces in silver ETFs there’s 1.4 billion ounces in silver coins there’s a lot of silver out there that investors own that if they’re disenchanted or they want to try something else they may sell some and they some of them are selling stuff now so do you think then Jeff that there’s more sellers out there than buyers because we’ve seen you know retail investors or these people that want a little bit of skin in the game okay gold at these levels is too pricey I’ll buy some silver maybe not going to balance out here this time uh I think right now the balance you know our estimate our expectation is that demand for silver will be more positive in the second half of the Year for all those economic and political reasons I just mentioned uh and that for the full year you will see investors as small net buyers it’s nowhere near what silver promoters talk about you know when they’re talking about hundreds of thousands of uh hundreds of millions of ounces of silver demand you know net investment demand last year was very low like 12 million ounces it’s probably going to be roughly about the same this year year depending on what happens in the second half of the year in terms of the economic environment interest rates the dollar and the political environment uh around the world uh but right now I think that you probably are seeing invest as pretty much neutral uh they were net sellers in the first two three months of the year as the price Rose in April and May March April May they there was more buying that came into the market it’s probably pretty much flat right about now I know a lot of the coin dealers that we talk to have been complaining about a large inflow of silver and gold coins and and bars by people taking profits okay Jeff we talked a little bit about that you know that uh that we can cover dual demand in silver I mean you know we got the industrial demand of course we got the monetary policies or the monetary asset here uh talk to me a little bit about this recent report I was reading this morning that according to TD uh Chinese solar output Cuts due to an oversupply it’s caused traders in Shanghai to sell off a significant portion of their silver Holdings you know given China’s huge role in the silver market talk to me about how these actions influence the price and what investors should be keeping an eye on in response to these types of shifts yeah uh I’m not I’m not sure about the extent to which people are dumping silver in Shanghai right now uh it’s funny because we are actually about to release the first of two silver market commentaries on Chinese silver prices because uh there’s a lot of I think misunderstanding about silver pricing in China on the part of the silver investment community over here uh so we’re in the final edits of the first of two-part uh series of Market commentaries on that but looking at solar power and its use of silver in general there’s been a big increase in the use of silver in solar panels there’s been a very big increase in the capacity in to make solar panels around the world China is the leader but countries like the United States Saudi Arabia the United Arab Emirates various countries in Europe countries around the world are developing their own solar panel manufacturing business and that has required additional soar so the International Energy agency looks at it and they say okay we have a solar panel industry globally now that’s probably operating at less than 50% of capacity a lot of Industries don’t work profitably if they’re at less than 50% capacity so you’ve got this situation that’s there you’ve got overc capacity you had an overbuild last year so you have inventories hanging of of manufactured panels in the solar panel Market that means that solar panel manufacturers should and are cutting back on their new silver purchases and their silver and their output they you say let’s live off of these inventories for a while let’s get inventories down to a lower level but you do have this long-term overc capacity that is a real threat there our expectation is that silver use in solar panels which rose very sharply last year maybe a third of last year’s build and demand is sitting in inventories waiting to be absorbed this year we’ll still see some increase in silver use in solar panels on a global basis this year and in China but it’s going to be a much smaller increase than we saw last year because of this overc capacity and these uh unsold inventories of solar panels and I think that that’s there whether or not that has led investors to sell off silver in Shanghai I can’t really talk to that right now yeah I mean you wow that’s a crazy a third of the panels in inventory uh okay let’s talk a little bit about the pricing then I mean Silver’s busted pass $30 Mark our own Jim wof says that our next upside price is above solid technical resistance at 3275 what’s your forecast for Silver this year Jeff our forecast is that the price will probably average somewhere in the 28 to 3031 range I should say that you know our precious metals Market uh our precious uh Metals Market advisory for June comes out later today and we’ll probably have revised price projections there but we are looking at somewhat higher prices as we have been for some time we’ve been talking about the idea of gold and silver prices spiking in 2024 2025 possibly into 2026 for silver uh and you know in terms of annual average prices getting to record levels in gold and getting to near record if not new record levels in silver uh so this is sort of what we’ve expected it has to do with again that tight Supply demand balance fabrication Demand versus total newly refined silver uh the fact that some investors are selling other investors are buying and there are any number of investors who holding a lot of silver saying okay let me see how high it goes before I sell or maybe I should start buying again uh in the expectation and you know politicians around the world are giving investors all kinds of in indications that they should be buy gold and silver yeah yeah no kidding okay well then are you looking at any mining stocks currently in hopes that these precious metal prices catch up is there any opportunities here for investors to take advantage of on the equity side well we’re cftc regulated Commodities advisors not SEC Equity advisors so we don’t talk about individual companies uh publicly uh right that said we do look at the the silver and other metal mining Industries and you know our view is that there’s a misplaced hope you know a lot of people say Okay mining stocks have lagged metal prices mining stocks often lagged metal prices in the bull market but they play catchup and therefore we should expect mining stocks to rise but I think that may be misplaced because what you’re seeing is not a Mining stock problem you’re seeing a equity problem uh the equity markets have shifted to where the predominant investment theme mechanic mechanisms are electronic uh you know uh mechanical trades into indexed futures or indexed options indexed funds indexed ETFs and if you’re a large enough Mining Company to fit into one of those indices then that might be beneficial to to your stock price but most precious metals mining companies are too small to be in those indices and they’re kind of dropped out so they’re suffering because there’s been a disconnect between equity markets and capital formation and it’s not limited to mining if you look at any index the TSX the the S&P 500 you’ll find that the vast majority of smaller companies are suffering in terms of their Equity performance because investors are not buying equities so much anymore they’re buying indexed funds and indexed ETFs and that tells us and then you go into it and you see a lot of secular long-term changes on the Institutional Investor side and as a consequence of those changes most of which are negative in many ways uh changes on the on the cell side of the equity markets and that’s probably not going to reverse which means means that smaller equities mining companies and other companies probably will not do as well as a lot of people are hoping uh so you know we have this macro view of the mining Equity Market Which is less hopeful than a lot of other peoples oh there will be so many sad people to hear that I am curious I mean you teased a little bit about some new information coming uh kind of talking about misguided views when it comes to Precious out east and in Asia I know that this is a tease and I’m not sure when we’re going to air this but just give us a little insight into what that means are we overlooking some things here I’m not sure that we’re overlooking things but if you look you know if you talk to central banks and you there’s a very interesting study done by a think tank in London that was they released their results this year uh this week and they you know they did a poll of Central Bank re Reserve managers and 18% of the reserve man managers had said that they expect to increase their dollar Holdings over the next 12 to 24 months they’re looking at the dollar in a way that people within the central banking Community have been talking about for years on a theoretic level and you’re starting to see it the the the idea that the dollar is not collapsing That central banks are not dumping dollars that central banks own more dollars now than they’ve ever held before and that a lot of central bank reserve managers look at the dollar and they say okay where would I put my Reserve assets if they’re not in the dollar in the Euro or the Canadian dollar or the Japanese Yen or the Juan and you know you’re seeing a reduction in wand purchases by central bank reserve managers you’re seeing an increased realization that for all of its warts the United States economy may be in better shape than other economies and go the dollar may be stronger longer and may retain its day facto Reserve currency status now other central banks and some of those same central banks are saying okay so it’s the dollar but it’s also gold they’re buying gold and they’re increasing their amount of gold but gold is still very minuscule uh you you you you mentioned bricks in your earlier question Brazil and South Africa two of the the for five bricks don’t have enough gold for it to be a significant part of their economy India and China have the gold stays here policies so they have no interest in any gold utilization in monetary uh settlements international monetary settlements they are now China is not going to pay for its imports from other countries with gold they’ll pay for it with dollars and euros and anything El other currencies you know and India is in the same mode as I said Russia you know they’re they have a wartime economy something like 75% of their economy is now focused on this war effort so they’re buying and selling gold month-to month buying inter internally selling internationally in order to finance the economy and the war effort so you know there’s the there all of this talk about bricks stocking up on gold is just not there but what about opinion of you know the United States weaponizing the dollar and obviously people in within the central banks saying okay we need to be at least aware of this is that why a little bit more uptick in the in the gold buying you know there there are these things that people say especially in the gold market and I you know my wife and I just laugh and and it’s a it’s it’s a graveyard laugh I mean anybody who thinks that the dollar has recently been weaponized yeah you know must have been brain dead for any period of time since the 1860s you know I mean the dollar has always had a political aspect to it and there’s no greater weaponization now than there was in 1978 you so it’s just not and you know you you hear other things like oh with the Advent of Central Bank digital currencies central banks will be able to see every transaction that you uh do first off they don’t care second thing is they’ve been able to see that for decades you know I mean credit card companies gave the give the governments and and banks give the governments reports on what their what their clients are doing yeah so there’s all of this paranoia about what’s going on with the dollar and what’s going on with central banks and what’s going on in the movement to Central Bank digital currencies that’s just totally misplaced and in the case of Central Bank digital currencies and I guess I’m getting a little bit off topic of your question if you go back to the 1880s I think it was with the Advent of checks right you had the same concerns oh my God you know these guys want us to use checks instead of dollars or or gold coins or silver coins uh so they can see and control what we do and what we buy and what we sell you know it’s just you know more smoke than fire then hey Jeff after World War II there was a codery of people in the United States government and big business who said we can’t afford an educated voting population you know we’re facing the Cold War and and if people know too much they’re not going to support our policies and you know so you’ve seen you know back then there was this whole movement against broadening education Ronald Reagan in 1980 ran on a platform that he was going to liquidate the board of educ uh the Department of Education you know we really want to keep our voters stupid and to some extent they’ve succeed it Jeffrey Christian you’re always cutting through the noise my friend we appreciate your time today of course Jeff’s the managing director of the CPM group hey thanks for joining us today I always appreciate your insight into this and some reality checks as well well I appreciate the opportunity to vent thanks Jeff appreciate your time today I’m Jeremy saon stay tuned for more great content of course and for all of us here at Kito news thank you for watching don’t forget to follow leave a comment and we’ll see you next time [Music]

Jeremy Szafron, Anchor at Kitco News, interviews Jeffrey Christian, Managing Director of the CPM Group, for an in-depth analysis of the precious metals market. Christian explores the impacts of recent economic measures, including interest rate cuts by the ECB and the Bank of Canada, moderated labor costs in the U.S., and the current economic conditions on the pricing and stability of gold and silver. Jeffrey shares his expert views on the future of these metals, investment strategies, and what investors should keep an eye on.

Follow Jeremy Szafron on X: @JeremySzafron (https://twitter.com/JeremySzafron)
Follow Kitco News on X: @KitcoNewsNOW (https://twitter.com/kitconewsnow)
Follow CPM Group on X: @CPMGroupLLC (https://twitter.com/CPMGroupLLC)

00:00 – Introduction
01:23 – Economic Measures and Their Impact on Precious Metals
03:48 – Investment in Gold and Silver
05:51 – Gold Price Forecast for 2024
07:40 – Central Bank Buying: Trends and Surprises
11:02 – Silver Market Dynamics and Industrial Demand
13:24 – Investor Activity and Silver Price Movements
15:18 – Chinese Solar Output Cuts and Silver Prices
19:00 – Silver Price Forecast for 2024
20:55 – Opportunities in Mining Stocks
23:44 – Central Bank Digital Currencies and Dollar Weaponization
28:30 – Closing Thoughts

#KitcoNews #JeremySzafron #JeffreyChristian #CPMGroup #PreciousMetals #Gold #Silver #Investment #EconomicMeasures #InterestRates #CentralBanks #GoldPriceForecast #SilverPriceForecast #MiningStocks #InvestmentStrategies #FinancialAnalysis #economy
__________________________________________________________________
Kitco News is the gold standard in precious metals, commodities, cryptocurrencies, mining, and financial news.

SUBSCRIBE to our channel to stay up to date on the latest market and industry news.

For breaking news, views, charts, and data on precious metals, cryptocurrencies, and financial markets – visit us at https://www.kitco.com

To get market updates on the go, download the Kitco Gold Live! APP – https://applications.kitco.com

Stay connected:

Twitter – https://twitter.com/kitconewsnow
Instagram – https://www.instagram.com/kitconews
Facebook – https://www.facebook.com/KitcoNews
LinkedIn – https://www.linkedin.com/company/kitconews
StockTwits – https://stocktwits.com/kitconews

Live gold price and chart: https://www.kitco.com/gold-price-today-usa/
Live silver price and chart: https://www.kitco.com/Silver-price-today-USA/
Live crypto market data: https://www.kitco.com/price/crypto/

Learn more about Kitco News: https://www.kitco.com/news/about/

For more information on advertising, sponsorship and marketing promotions – please visit our online media kit at: www.kitco.com/advertising

Disclaimer: The videos are not intended to provide trading advice, and the views expressed do not necessarily reflect those of Kitco Metals Inc. Kitco News, its anchors, producers, and reporters are not responsible in any way for the performance or actions of any sponsor, advertiser or affiliate of Kitco News. In no event will Kitco and its employees be held liable for any indirect, special, incidental, or consequential damages arising out of the use of the content in this video.