opinion

Gold and silver ALERT: Why a pullback doesn’t end the bull market

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By CPM Group
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Gold and silver ALERT: Why a pullback doesn’t end the bull market teaser image

In this presentation, Jeffrey Christian of CPM Group discusses the gold and silver price outlook, platinum and palladium fundamentals, and the investment demand assumptions behind precious metals surplus and deficit calculations. He explains why broken trend lines and possible further short-term weakness have not changed CPM’s expectation that gold and silver prices will rise over the longer term.

Jeff reviews several aspects of gold's recent movements, including its technical support around $4,000. He explains why CPM places greater weight on macroeconomic conditions, supply and demand, inventories, and investor behavior than it does on technical analysis. Technical analysis helps CPM assess timing and understand other traders’ decisions, but it does not determine our price outlook.

Jeff then looks at platinum and palladium. CPM estimates that above-ground platinum inventories have grown to roughly 14–15 million ounces, with about half held by investors. He also discusses platinum’s enlarged surplus and palladium’s greater price weakness and the reasons behind it.

The silver market discussion focuses on why CPM separates investment purchases from fabrication demand when calculating market balances. Jeffrey shows how this distinction can change the number of years reported as deficits and explains why investors and fabricators should be analyzed separately.

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CPM Group

CPM Group is a commodities research, consulting, financialadvisory and commodities management firm providing independent research,analysis and advisory services related to commodities markets, corporate andproject finance, and the financial management of exposure to commodity orientedinvestments.

We started our business in 1986 predicated on the idea that commoditiesresearch and advice is best delivered by independent experts who do not work forbanks, brokers, mining companies, or any other entity that has interests thatcould conflict with the best interests of the clients receiving the research,analysis, and advice.

All of our work is driven by fundamental commodities research and economicanalysis. As we undertake our research into individual commodities markets wegather a tremendous amount of information and develop an enormous body ofextremely high quality, unbiased analysis of the markets and the companies thatare involved with individual commodities. The outputs of our research andanalysis take the form of research reports, specialized and targeted consultingrelated to these markets, financial advisory services ranging from corporate andproject finance structuring to equity introductions, and managing specificcommodities and investment positions for clients.

CPM Group continues to demonstrate the economic value and financial worth ofsuperior research, information, and analysis. Our research is based onmicro-economic analysis of the individual components of each commodity market,wedded with a top-down macro-economic analysis of the global trends affectingthese markets. We apply the results of that analysis to our research,consulting, and advisory services.

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goldsilverJeffrey ChristianMacroeconomic conditionstechnical analysis
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