A Year for Accumulation, Jeff Christian August 2019 Part 1
Sean Brazney: Hello, my name is Sean Brazney, Sales Director from Monex Deposit Company. I'm here with Jeffrey Christian, Managing Partner of CPM Group. Jeffrey, it's been a couple months, a lot has changed in the precious metals market and I know our viewers are eager to hear from you. So, I greatly appreciate you being with us today.
Jeffrey Christian: It's good to be here. Yeah, it's definitely one of those interesting times in the precious metals business now.
Sean Brazney: Yes, the gold train seems have left the station and seems to be pulling silver right along with it. In the CPM Group Precious Metals Advisory, you have a bubble chart that may help to explain why some of this may continue. Would you be willing to share some of that data with our viewers?
Jeffrey Christian: Sure, I think it has been that it's a good time to accumulate gold and silver, because we thought there were a lot of big economic and political issues that ultimately would cause investors to sharply increase their demand for gold and silver and that would drive the prices higher. We thought that... what we kept saying was that we didn't know when those problems would come home to roost, but we thought it would be later rather than sooner and I think what we've seen over the last two months, really June, July, into August now, is that the future is becoming the present and as you said, "The train seems to be leaving the station." A lot of those economic, and political, and to some extent financial market issues that we had been worried about that we thought would cause investors to seek gold and silver seemed to be much more likely to be coming to fruition now and in the next 6, 12, 24-months, than later than it was. So, that bubble chart that we have, it shows the likely impact on gold of various economic, political, and financial problems that are facing the world and individual countries and those bubbles have gotten larger over the last few years and they moved to the right as they become likely to have a greater impact on gold, but they haven't risen in terms of probability of being a major problem within the next six months. Now, in our bubbled chart, which is based on our model of the global economy, those bubbles are rising to the top. So, it looks to us as if the future is becoming the present. The period of accumulation is continuing, but the period of price appreciation off of that base is probably now starting to emerge. So, it becomes a little bit more dramatic in terms of ones need to step up that accumulation.
Sean Brazney: The U.S. lowered interest rates in July on the heels of some good economic data. Today's CPI number came out and still showed an increase in that potential core inflation. I'm already starting to hear speculation that potentially the Fed does not lower rates again in September. Do you think some of that speculation will give an opportunity for buyers to find a dip to get in?
Jeffrey Christian: Yes, I mean, we have... our view is that the Fed will lean toward being accommodative. They may lower interest rates in September. I don't think that today's CPI numbers alone would cause them to not lower interest rates a second time, but they will be watching things. But then again, what you just said is much more important than what the Fed thinks, which is... how is the market perceiving that? You saw, even today, you saw a $57 spread in the gold price, just today, August 13, when we were recording this. So, what you're looking at is investors who are extremely concerned about what could upset either the stock market or the gold market. We do think that you will find times over the next few weeks when the prices spike down as they did today, after the CPI came out and after the U.S. government said that they were going to postpone the latest round of tariffs that they've threatened against China, you saw the gold price come down. What we've been telling our short-term investors is to take opportunities of any dip in the prices to build your portfolio, because the prices clearly are now in that upward trajectory and so any dip in prices, because investors start worrying about better than expected economic conditions, probably represents a buying opportunity for gold and for silver.
Sean Brazney: Thank you Jeffrey. Your perspective is also always very refreshing. You've heard it directly from Jeffrey Christian, Author of Monex's, Year for Accumulation Report. Call Monex today and ask for your free, Year for Accumulation Report. Thank you for your time Jeffrey.