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How has the CPM Group helped clients and investors take advantage of timely opportunities in the gold and silver markets?

January 6, 2016
Video Transcript

CPM Group, traditionally, has one reputation as a company that tries to get markets right. For the majority of the time between 1980 and 2000, we were actually our intermediate term, 2-3 year outlook, for gold and silver was negative. So about 68% of the time in those two decades, we were telling investors if you're looking at a 2-3 year time horizon, don't necessarily buy gold at this point.

In November of 2000, we issued a buy-recommendation on gold and silver. We said that we thought the economic and political environment that causes investors to buy gold would be worse for many years going forward from 2000, than it had been in '79 and '80 when it drove the price of gold to $850 and silver to $50. We held those buy-recommendations into January of 2012. In 2010, we started warning our clients that we thought that we were reaching what we were calling a "cyclical peak in the secular bull market." We thought that the prices of gold and silver would likely continue to rise for a number of years on a long-term basis. Within the context of that long-term or secular increasing gold and silver price, we thought that gold and silver could enter into a cyclical downtrend from around 2011 going forward. It could last for gold until 2013-2015 and for silver 2013-2016. We had laid out ideas of how low we thought the prices would go. We thought that gold could go to $1300-$1400 and find a base on an annual average basis. So that means you can go below $1300 on an intraday basis. We thought that gold price would come down there and form a base and then move higher later, beyond 2014.

So in January 2012, our monthly report to our clients had the headline, "Time to sell." We had been having a buy-recommendation for gold and silver from November 2000 to January 2012. We've never had that long duration of a buy and hold or buy and add to your position recommendation in our history. In January 2012, we said, "Time to sell." In June 2013, we said, "We're looking for $1300-$1400 on an annual average basis; we're basically there now." From an intermediate term perspective, if you're going out 3 years or longer, this may actually be a good time to buy. Our view is that the low of $1180 at the end of June last year for gold and $1850 for silver, probably are the lows. We might have another spike below that. If we do, it would probably be within the next few months. We are not necessarily convinced that we will see the spike below that. There are some temporary things pushing gold prices higher in January. They will reverse in February and March, but we think that as the year progresses there are going to be economic, financial, and political events that will cause investors to continue to buy gold or step up their gold and silver purchases.

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