January Eye of The Storm

Sean Brazney: Hello! My name is Sean Brazney, Sales Director for Monex Deposit Company. I have the great joy of having Jeffrey Christian here with us today, a Managing Partner and Founder of CPM Group, one of the many analysts over there at CPM Group. Thank you for being with us today Jeffrey.

Jeffrey Christian: It’s always a pleasure to be with Monex.

Sean Brazney: We’re kicking off a new year. We should have some new reports coming out here soon. We’re going to have hopefully
some great opportunities to talk about throughout the year. It just leads me to want to lead into the year after listening to your video, actually this morning. I got a chance to see your video, “What Smart Investors Need to Know About Silver.” Great video by the way! Supply, demand, and some of the factors around that. I’m hoping you can touch base a little bit on the details of some of that, since we’re going to just kind of lead off with silver, but one point in that video that I want to just kind of bring up is you mentioned something in there that talks about back in 1997 when Berkshire bought a bunch of silver down around $5 dollars and sold out of it at $10 dollars and credible return on the investment during that time frame, regardless if the price kept going up, but there was an objective. They had an objective in silver, and they exercised and performed with that objective, and of course did very, very well with that. It leads me into these videos and reports that we do and why we’re providing this information for investors is so they can gather the right intel, the right data, and come up with an objective, not just kind of throw darts, but to come up with an objective and its one of those things I love about being able to do this with you and share this information. Again, we’d love your take on silver again based on some of the information that you had in that video.

Jeffrey Christian: Yeah, we’re still… we have a positive view on both gold and silver. We’re seeing strong price increases in the first three weeks of this year. Part of that is seasonal and part of it is investors trying to wrestle with where the markets and the economy are going to go. I think this is going to be a kind of… I would say… a sloppy year— it’s a year in transition economically and politically. There’s a lot of moving pieces that will be pushing precious metals lower and pulling them higher at the same time. So, I think it’s going to be an interesting year, volatile not only in precious metals, but also in currencies and in stocks and bonds. So, I think that you’re seeing that.

Another thing that you’re seeing right now is a lot of investors looked at the performance of various assets last year, silver from the start of 2022 to the end of 2022, was up about 3%, gold was off about .1%, and at an annual average basis they were both up, gold was actually at a record annual average price last year. Then you look at stocks and bonds and real estate and they were all off 11% to 22%. So, you’ve got a lot of mainstream investors, institutional investors as well as individual investors, who went away for the holidays and they looked at their portfolios and looked at what happened in 2022 and they said, “Gee, anybody who was in gold and silver, at least had a portion of their wealth in gold and silver, did better than those people who didn’t,” and precious metals did a very good job in diversifying portfolios and protecting people from adverse stock market, currency market, and bond market performance last year. Going forward, I think that you’ve got a lot of investors, you’ve got more investors in January 2023 who think that, than you did in January 2022. I think that’s a very positive factor for gold and silver and it probably means that maybe the prices don’t run away initially. I think we’ll see a strong first quarter. We’ll see a more quiet second and third quarters, but I think in the long-run, and I define the long-run as the fourth quarter of 2023 and going forward, I think that you’re going to see gold and silver perform very well, as portfolio diversifiers and also as sources for capital appreciation.

Sean Brazney: One area of the market that I’ve been watching lately is the dollar. The dollar, I like to say, has been doing an army crawl under the barbed wire, it just has not really peeked its head up for any long duration of time. It’s trading at about $1.01 in change. I was really thinking it was starting to get a little bit over sold around $1.03 and it just keeps pressing lower. It’s interesting to see gold, it continues to levitate and make higher highs in the face of that as well, but what do you think are some of the factors that are kind of keeping the dollar down where it is right now? Do you think it’s primed for a little bit of a rally any time soon?

Jeffrey Christian: Yeah, the dollar is at an interesting place. On a trade weighted basis and against various other currencies, individual currencies, the dollar is off about 9% from late October early November peak, but it’s still up depending on how you measure it, 7%-11% from where it was in the second half of 2021 and early 2022. So, the dollar has shown more strength than all the dollar doomsayers have said. It was very strong up until the end of October early November and it’s come off a little bit there, but it’s still very strong, and our expectation is that’s what you’re going to see for the dollar going forward. There are any number of people who have been forecasting the death of the dollar for 10-, 20-, 30-years and it really hasn’t happened, and it’s probably not going to happen, and there’s a variety of reasons, including the comparative strength of the United States economy compared to a lot of other parts of the world, as well as, the comparative strength of the U.S. rule of law for capital formation and for economic growth. So, I think there are reasons to think that the dollar is going to stay relatively strong, but by the same token you do see stronger economic activity in Europe and in Japan, which are the other major traded currencies where you factor it into the trade weighted dollar. So, I’m not necessarily looking for another 20% appreciation in the dollar this year, but I’m definitely not looking for a 20% depreciation in the dollar. I think that if you said the dollar might move in a band of plus or minus 10% of where it is today over the next 12 months, that’s probably reasonable. Is that volatile? It’s more volatile than it is at times, but it’s not necessarily particularly volatile from a historical perspective.

Sean Brazney: I look forward to covering that a little bit more with you throughout the year. Late last year, I think it was that September-October time frame, I know gold found some pretty good lows on the charts. I know it found a low down around $1,620. It’s around $1,930s or so, it’s $1,940 today, it’s made about a $300 move to the upside. Silver trading down near the $17’s, low $17’s. Traded up as high as $24.40’s, which by the way in some of your reports late last year, you did think that silver would trade in the $24.40’s area. So, great call on that one again?

Again, reminding our viewers that CPM Group has been around for a while. It’s got some of the greatest analysts out there. Jeffrey, you’ve been in the market for commodities research for 50-years. We provide this information for you. It makes sense to even go to CPMGroup.com, sign-up for these videos, get this stuff in your hands.

Also, of course, make sure you’re calling Monex, talking to an account representative, and getting these free reports in your hands. We’re doing everything that we can to get you the right data. We are looking forward to a fun new year with you.

Jeffrey Christian: Well, thank you for having us as always and we look forward to doing more videos and more reports for Monex throughout the year and for finding other ways to work with Monex.

Sean Brazney: Thank you for your time Jeffrey!