Driving Factors Behind The Sharp Rise And Drastic Decline Of Gold & Silver Prices, And What's Next.

Summary

Jeffrey Christian of CPM Group discusses the recent fluctuations in the gold and silver markets, emphasizing the role of profit-taking by investors after significant price increases. He dispels rumors of market manipulation, highlighting the intellectual asymmetry and misinformation prevalent in these markets. Christian also addresses the lack of oil price spike following Iran's missile attack on Israel, attributing it to oil exporters' desire to avoid a recession and lower demand. He outlines CPM Group's historical and current recommendations on precious metals investments, noting their buy recommendations for gold since 2000 and silver since 2019, and cautions against relying on marketing reports that may mislead investors.

Takeaways

• 📈 The gold and silver markets have been moving higher since the beginning of March, with a particularly steep increase on the last Friday mentioned.
• 📉 Prices fell sharply after the increase due to widespread profit-taking from investors around the world, which is a common occurrence after sharp rises.
• 💰 There is a significant amount of misinformation in the precious metals markets, with over a billion dollars flowing into commodity index funds, which can lead to distorted market behavior.
• 🌐 The rise in precious metal prices was due to broad-based buying from investors globally, not just a single large investor or entity.
• ⏰ Many market participants take profits before the weekend, especially after periods of sharp price increases.
• 🇺🇸 The U.S. Treasury is not likely to be behind any price manipulation of gold and silver, as it holds a significant amount of gold and has no incentive to decrease its value.
• 🛢️ Oil prices did not spike after the missile attack on Saudi Arabia due to oil exporters not wanting to raise prices during a weakening global economy.
• 🔍 Major oil companies and the U.S. have interests in keeping oil prices stable and are unlikely to push for higher prices that could lead to a recession.
• ⛴ The presence of the U.S. Navy in the Persian Gulf protects oil tankers and has historically reduced risks, which is why oil prices did not rise during the mentioned conflict.
• 📚 CPM Group's research and recommendations on gold and silver are based on in-depth analysis and have been consistent over the years, with buy recommendations in place since 2019 for silver and around 2013-2014 for gold.
• ⏳ CPM Group is planning to release a silver yearbook with definitive statistics on supply, demand, and usage in solar panels, aiming to clear up misinformation about silver deficits and shortages.

Q & A

What is the main topic of discussion in the transcript?

The main topic of discussion is the gold market, with some extent to the silver market, focusing on the factors behind the rise and fall in precious metals prices.

When did the gold and silver markets start moving higher according to the speaker?

The gold and silver markets started moving higher since the beginning of March.

What was the speaker's view on the steep increase in gold and silver prices on the mentioned Friday?

The speaker believes the steep increase was due to broad-based buying around the world by investors, and not because of any single large investor or institution.

Why did the speaker say that prices fell sharply on Friday?

The prices fell sharply due to profit-taking by short-term investors, especially going into the weekend.

What does the speaker think about the misinformation circulating in the gold, silver, and platinum group metals markets?

The speaker is concerned about the bad information and its effect on misleading investors, emphasizing the intellectual asymmetry and the vulnerability of these markets to misinformation.

What is the speaker's opinion on the idea that the US Treasury would be behind a price slam down in gold and silver?

The speaker finds the idea incredulous, stating that the US Treasury has no rational reason to wish for lower gold prices and that it has more to gain from rising gold prices.

Why did the speaker say there was no spike in oil prices after the missile attack by Iran?

The speaker explains that no oil exporter wants to raise oil prices at a time when the global economy is weakening, as it would lead to lower oil demand and probably lower oil prices in a recession.

What is the speaker's stance on the CPM group's intermediate term gold recommendations?

The speaker states that CPM group has historically been correct about 68% of the time with their recommendations, and they have maintained a buy recommendation on gold since around 2013-2014.

What is the projected timeline for silver prices to rise according to the speaker?

The speaker has been talking about silver rising to average well over $30 at some point in the years 2024, 2025, 2026.

Why does the speaker believe that platinum prices are low despite claims of a market deficit?

The speaker asserts that the market is not in a deficit but has been in a surplus for most of the last half-century, which explains the lower platinum prices.

What is the speaker's advice regarding the use of free data from marketing reports on precious metals?

The speaker advises caution, stating that if the free data suggests a deficit and higher prices, it may be marketing and not based on sound research.

What is the speaker's final message to the audience?

The speaker encourages the audience to take care of themselves and others, and to contribute positively to the world, even in small ways like picking up garbage.

Outlines

00:00

📈 Precious Metals Market Dynamics and Investor Behavior

Jeffrey Christian discusses the recent fluctuations in the gold and silver markets, noting a rise since March followed by a steep increase and subsequent drop. He emphasizes the role of profit-taking by intelligent investors, a common occurrence historically. Christian also addresses misinformation in the market, the influx of new investors, and the secretive nature of these markets. He clarifies that the US Treasury is unlikely to be involved in price manipulation due to its significant gold holdings and the limited utility of gold in addressing fiscal issues.

05:01

🛢️ Oil Prices and Global Economic Factors

The absence of a spike in oil prices following the Iranian missile attack on Israel is attributed to the reluctance of oil exporters to raise prices during a weakening global economy. Christian explains that economic slowdowns lead to lower oil demand and prices, which are undesirable for oil exporters. He also touches on the geopolitical tensions involving Iran, Saudi Arabia, Pakistan, the United States, and Israel, and how these dynamics affect oil prices and market expectations.

10:03

💰 CPM Group's Gold and Silver Recommendations

Christian outlines CPM Group's historical and current recommendations on gold investments. He mentions their long-standing buy recommendation from November 2000 to January 2012, and a subsequent sell recommendation. He also discusses the premature buy recommendation issued around 2013-2014 and the current buy recommendation in place since then. Christian provides insights into silver's potential to reach over $30 in the coming years, based on supply and demand factors, and refutes some common misconceptions about deficits and shortages in the silver market.

15:06

📚 Upcoming CPM Group Publications and Market Misinformation

Christian announces the upcoming release of CPM Group's silver yearbook, which will provide definitive statistics on silver's supply and demand, including its use in solar panels. He also addresses the spread of misinformation about silver and platinum markets, emphasizing the need for accurate data. Christian advises investors to be cautious of marketing reports and to rely on solid research for investment decisions. He concludes with a reminder to take care of oneself and others, and to contribute positively to the world in any small way possible.

Keywords

💡Precious Metals

Precious metals are rare, naturally occurring metallic elements that have a high economic value. They are typically characterized by their beauty, rarity, and resistance to corrosion. In the video, Jeffrey Christian discusses the rise and fall of precious metal prices, including gold and silver, which are the most commonly recognized precious metals. The fluctuation in their prices is a central theme of the video.

💡Profit Taking

Profit taking refers to the strategy of selling an asset, such as precious metals, after it has increased in value to secure the profit realized from the price increase. In the context of the video, Christian explains that sharp declines in precious metal prices can often be attributed to widespread profit taking by investors, especially after periods of significant price increases.

💡Commodity Markets

Commodity markets are places where buyers and sellers trade primary or raw materials, such as metals, agricultural products, and energy resources. The video discusses how commodity markets, including those for precious metals, are affected by various factors like investor sentiment, misinformation, and market liquidity. Christian highlights the 'intellectual asymmetry' in these markets, where good information is scarce, and bad information can spread easily.

💡Misinformation

Misinformation is false or misleading information that is spread, regardless of whether there is an intent to deceive. In the video, Jeffrey Christian addresses the issue of misinformation in the precious metals and commodity markets, which can lead to confusion and poor investment decisions. He emphasizes the role of CPM Group in providing accurate research and countering the spread of such misinformation.

💡Market Manipulation

Market manipulation refers to the act of artificially inflating or deflating the price of a security or commodity. The video script mentions the idea of a 'slam down' in prices, which some might interpret as market manipulation. Christian refutes such claims, explaining that significant price drops are often due to rational profit-taking rather than nefarious activities, and he dismisses the notion that entities like the U.S. Treasury would engage in such practices.

💡U.S. Treasury

The U.S. Treasury is the financial agent of the U.S. government, responsible for producing currency and formulating economic and financial policy. In the video, Christian discusses the U.S. Treasury's holdings of gold and clarifies misconceptions about its role in the gold market. He explains that the Treasury has no incentive to manipulate gold prices downward, as it holds a significant amount of gold as part of its reserves.

💡Oil Prices

Oil prices are the cost at which a barrel of oil is bought or sold on the open market. The video touches on oil prices in the context of geopolitical events, such as the conflict between Iran and Israel. Christian explains that despite expectations, oil prices did not spike following missile attacks due to the global economic weakening and the desire of oil exporters to avoid a recession that would reduce demand and prices.

💡Geopolitical Tensions

Geopolitical tensions refer to the strained relationships and conflicts between different countries or political entities. In the video, Jeffrey Christian discusses how such tensions, particularly those involving Iran, Israel, and the United States, can influence perceptions of risk in the oil market and potentially impact oil prices. However, he suggests that major oil exporters are unlikely to want higher oil prices due to the global economic slowdown.

💡Investment Recommendations

Investment recommendations are suggestions or advice given by financial experts regarding the purchase or sale of financial assets. In the video, Christian outlines CPM Group's historical investment recommendations for gold and silver, providing context for their past and current positions. He emphasizes the group's accurate past predictions and their ongoing buy recommendations for both gold and silver.

💡Deficit and Surplus

A deficit occurs when the supply of a commodity falls short of the demand, while a surplus happens when supply exceeds demand. In the context of the video, Christian addresses misconceptions about deficits and surpluses in the platinum market, explaining that despite claims of deficits, the market has been in surplus for most of the past half-century, which contributes to the lower prices of platinum.

💡CPM Group

CPM Group is a financial consulting firm specializing in the precious metals market. Throughout the video, Jeffrey Christian refers to CPM Group as a reliable source of research and analysis on precious metals. He distinguishes their professional research from misleading marketing reports and emphasizes their commitment to providing accurate and in-depth analysis to their clients.

Highlights

Gold and silver prices have been rising since the beginning of March, with a sharp increase last Friday followed by a drop on the same day.

There is a lot of misinformation circulating in the gold, silver and platinum group metals markets currently.

Past examples show gold prices often fall sharply after a rapid rise, due to widespread profit-taking, not a nefarious 'smackdown'.

Over $1 billion has flowed into commodity index funds in the past 1.5 months, chasing prices higher and contributing to misinformation.

Precious metals markets are intellectually asymmetric with little good information and a lot of misleading data.

The US Treasury has no rational reason to want lower gold prices and is not behind any 'slam down' of the market.

Oil prices did not spike after the missile attack on Israel due to weakening global economic growth and oil exporters' desire to avoid a recession.

Major oil companies and many in the oil exporting world do not want to see higher oil prices.

Iran views Saudi Arabia as its biggest enemy, followed by Pakistan, the US and Israel.

CPM Group has had a buy recommendation on gold since November 2000, except for a brief sell recommendation in 2011-2012.

CPM Group has had a buy recommendation on silver since 2019, expecting it to rise to over $30 an ounce in the next few years.

There is a lot of inaccurate information about silver and platinum being in deficit and shortages. The markets are not in deficit.

CPM Group will publish its Silver Yearbook on May 14 with definitive statistics on supply, demand, solar panel usage, inventories and investment demand.

Free data from some marketing sources claiming deficits and shortages is just advertising and should not be used for investment decisions.

CPM Group's gold recommendations since 1980 have been to not buy gold 68% of the time.

The US Navy's presence in the Persian Gulf to protect oil tankers actually caused oil prices to fall in the late 1980s.

Transcripts

good morning it's Jeffrey Christian of

CPM group it's 10:40 in the morning here

in New York on Tuesday the 16th of April

I want to talk about the gold market and

to some extent the silver market the

factors behind the rise and fall in

Precious Metals prices last week we've

seen these markets moving higher for

more than a month now really since the

beginning of March they've been moving

much sharply higher last Friday we had a

very uh steep increase in gold and

silver prices as well as copper platinum

and Palladium uh and then the prices

came off on Friday

afterno there's a lot of Hy going around

all of these markets and I'm afraid that

we're going to have to talk about it and

hopefully I'll talk about what the

future holds

to preface

we've spoken in the recent weeks about

past examples of how metal prices gold

specifically in the examples we used in

those videos often fall sharply after

they've risen sharply uh this is true

and it doesn't represent a nefarious

Smackdown it is widespread profit taking

from intelligent investors around the

world that was the case in January of

1980 in March of 2008 in September of

2011 and at other times and it still is

true we're seeing a lot of garbage

information circulating the gold silver

Platinum Group medals markets right now

they're getting hot Commodities uh

investors are pouring into a some

investors have never been involved in

Commodities others are very uh

opportunistic and they're coming into it

uh new new after being away from it for

12 years or so um and there's bad

information that's circulating we've

seen more than a billion dollars worth

of money go into commodity Intex funds

over the last month and a half chasing

these prices higher and in that

environment bad information comes I've

said it in the past I'll say it again

one of the things I like about the

precious metals markets and commodity

markets in general is their

intellectual asymmetry

there is very little good information

around it is very unevenly spread across

the market there is a tremendous amount

of

misinformation and what you would call

Mal information consciously misleading

people about what's going on these are

relatively secretive ill liquid markets

they are underregulation compared to

stocks and bond markets and uh

they are vulnerable to bad information

we're seeing bad information in Gold

Silver Platinum markets right now CPM

group likes to use these videos to talk

about what's really going on in the

market and what's in real research

unfortunately right now I think we're

being being distracted and have to be

distracted by some of this bad data

simply because it's misleading

investors so yes golden silver prices

Rose sharply they Rose particularly

sharply last Friday and then they came

down why did prices fall sharply there

are all kinds of people saying all kinds

of stuff oh the Prices rose on one big

investor and having finished his

investment he walked away it's one large

institution it's a whale it's blah blah

blah it's bunch of nonsense

Prices rose on broad-based buying around

the world by investors who looked at the

world the state of the world and said I

think I want to have more precious

metals and prices fell sharply on Friday

on profit taking and there were a lot of

shorter term investors who came into the

market just last week or over the last

several weeks who took profits going

into a

weekend the majority of Market

participants in gold and silver are

rational and they don't believe all the

Hoy that you hear so when they see

prices Spike higher on a day or several

weeks of sharply higher prices they take

Prof profits and they often take profits

going into a weekend just to lock it up

so when gold rose 20% over the course of

a couple weeks and silver rose 33% or

32% over the course of a couple weeks

the vast majority of shortterm investors

said this is a good time to lock in

profits either by selling my metal or

selling my futures or buying puts so you

saw a big surge in trading volume not

just in Precious Metals but in Copper

options as well and in a number of other

Commodities and it was many buyers and

sellers around the world it wasn't a

single entity and no one should believe

that it's just not true and as I said

there was a lot of unfounded Luma Monger

there's no slam down all the people with

no real knowledge of how the gold and

silver markets work how financial

markets work would even talk about such

nonsensical stuff even more

incredulous is the idea that the US

Treasury would be behind such a slam

down the treasury owned more gold than

anybody else on Earth

261 million ounces worth approximately

$620 billion at prices around current

levels even so the US Treasury

understands that gold has little

relative monetary utility to it Beyond

being a monetary

Reserve people who don't understand

Central Bank monetary Reserve policies

say why is it that the US Treasury holds

so much gold while all the other central

banks hold so much dollars 60% of

Foreign Exchange reserves held by

central banks are held in US dollars but

the US Treasury holds no dollars well

the US Treasury cannot hold US dollars

as foreign exchange because it's not

foreign exchange it's the US dollar

furthermore there are other regulations

that apply to the US Treasury not

earning interest uh and other factors

there uh other central banks hold the

dollars because it's the de facto

Reserve currency right now the treasury

has more to gain in Rising silver gold

prices than anybody else on

Earth it has no reason to wish for lower

gold

prices and it understands that gold has

limited

utility related to fiscal

imbalances that 620 billion dollars

worth of gold represents five months

worth of the US government's current

fiscal

deficit it's not going to solve the

fiscal deficit problem it's less than 2%

of the 34 billion trillion dollars in US

debt so that Gold's there

but it doesn't really necessarily help

it and there's absolutely no rational

reason for the US Treasury or bullon

banks for that exam uh matter to slam

down the

price you might find Traders on desks

spoofing the

market but you're not going to find a

grand slam down in prices and the US

Treasury of all people have the least

interest in seeing

that now another topic I wanted to talk

about was why there was no spike in oil

prices after the 13th of April Iran

barrage of missiles and drones into

Israel main reason is that no oil

exporter wants to raise oil prices at

this time the US the global economy

growth is weakening we are seeing two

quarters of virtually no growth if not

outright contraction in Germany in the

UK already uh industrial production

figures came out from the the FED

today um for the most recent month in

the United States at zero growth overall

and contractions in consumer goods and

in uh housing and other factors

fortunately there was a strong growth in

business equipment orders and production

which is good because that's a leading

indicator of other uh economic

activities but you've got an economy

globally that is slouching toward a

recession or much lower growth and oil

exporters don't want to see that because

they make money selling oil to an

industry that in a global economy that

is well let's say well

oil they would see lower oil demand and

probably lower oil prices in a recession

and they don't want that it additionally

many major oil companies are not friends

of Iran they would love to see Israel

defang it um it's just not going to

happen probably Iran for its part sees

itself as having four major

enemies its most important enemy in its

mind if you read foreign policy

information coming out of Iran not from

Western sources is Saudi Arabia Pakistan

is its second largest perceived enemy

the United States is the third partly

because we've supported Saudi Arabia for

80 years and Israel is the fourth and is

useful to Iran only as a propaganda tool

you know let's distract all of the

people in the Muslim world uh from what

governments Muslim Islamic governments

have done to them by having an external

enemy in the entity of Israel and the

United States so it's highly unlikely

that the major entities of the oil

exporting World want to see higher

prices and would push prices higher in

the late 1980s Iran and Iraq were at War

and at one point the Iraqi Air Force

started shooting missiles at Kuwaiti oil

tankers and other oil tanks tankers in

the Persian

Gulf they asked the kues asked the

United States to provide Naval

protection for their tankers there was a

long debate in Congress about whether we

should do this and ultimately they ref

flagged Kuwaiti tankers as US flag uh uh

registered ships and the US I believe it

was the seventh fleet sailed into the

Persian Gulf and is still there and is

still protecting the oil ways there when

the seventh fleet sailed into the

Persian Gulf people in Europe and the

United States expected the gold price to

rise sharply because this represented

the US Navy Getting In Harm's Way Visa

the war between Iran and

Iraq the oil price fell

sharply we call our clients in Kuwait

and the UAE and Saudi Arabia and we said

um can you explain this to us and they

said our problem is solv our risks have

just plunged it's now the US Navy's

problem it's the US Navy's risk the US

Navy is still there guarding those

waterways and it's going to be

interesting to see what they do because

Iran is showing signs of wanting to

disrupt the flow of tankers and other

ships through the Persian Gulf and the

Straits of horn

but for now they haven't succeeded

they've got the US Navy which has more

Firepower than all of the armies

combined in the world through history in

between it and Saudi

Arabia and it's going to

be interesting but it's probably

improbable or unlikely that you'll see

oil prices Spike higher except on a very

brief basis because of those problems

oil prices could Spike higher for other

reasons but not that now I wanted to end

with a couple question these are CPM

group's intermediate term gold

recommendations since

1980 1980 to 200000 back and forth about

68% of the time we said don't buy gold

don't be long gold from a two to threee

try uh price uh price expectation

perspective you should be sharting gold

in November

2000 we gave a speech when we launched

our gold yearbook which was called the

gold survey back then and we

said that we thought that for the next

several decades the economic financial

and political environment would be more

hostile than it was in

1979 when gold went from $190 to

$850 and we thought that gold prices

would spike way past 850 and stay higher

for

longer that 850 would look cheap in in

hindsight over the next several decades

we kept that buy recommendation in place

from November of 2000 into January 2nd

of

2012 we actually started telling our

clients to sell their gold in September

and October of 2011 but we issued a

formal printed published

uh sell recommendation in a report

precious metals advisory first one of of

2012 title a time to

sell we issued a buy recommendation

around 2013

2014 a little bit premature the price

moved sideways for five years uh but now

it's been rising and that by

recommendation is still in place and

these are all published so any troll who

wants to say that I'm a bear it's just a

liar and they're one of those people who

do something that I just don't

understand but it's very common they

speak about things that they clearly

don't know anything

about similarly with silver you know we

issued a buy recommendation for silver

in around

2001 we took it off in March now April

of

2011 and we put it back on around 2019

and we've had a buy recommendation on

Silver for

2019 and we've been talking about gold

and silver gold prices were rising to

new record highs in 2024 2020 uh five

for several years now and we've been

talking about silver rising to average

well over

$30 at some point in 2024 25 26 for

several years

now and by the way the record annual

average price because that's what we

project the a record annual average

price was around $35 per ounce in 2011

2012 so we're talking about silver

prices on an annual average basis

approaching their past record high we're

not talking about $100 silver I know

there are some people doing that but

it's not

us we will be coming out with our silver

year book on May 14th it will have

definitive statistics on Supply demand

how much silver actually being used in

solar panels as per told To Us by the

silver panel

manufacturers right um inventories

investment demand the supply demand

balance we'll probably do some reports

for our clients and maybe a video

between now and May 14th on the title of

the sharded Shamira because there's a

lot of garbage going around about silver

being in a deficit and running out of GL

above ground inventories and it's just

not

accurate and we may do a similar one on

Platinum because platinum's not in a

deficit people keep asking us how is it

that platinum prices can be so low if

the Market's in a persistent deficit and

the answer is I don't know because the

Market's not in a deficit thek Market

has been in a surplus for most of the

last half century and it continues to be

in a surplus and that Surplus explains

the lower platinum prices if you're

looking at free data that you get from

some marketing GLE in silver or gold or

platinum and they're telling you there's

a deficit and a shortage and the price

should be much higher you're looking at

marketing reports as the head of one of

the world's largest precious metals

refiners said to us years ago CPM group

sells research they sell

advertising if you want to base your

investment decisions on

Advertising that's your prerogative It's

a free country still take care we'll

talk to you on Friday in the meantime

take care of yourself take care of

people around you see what you can do

for the world even if it's just picking

up garbage on your way home that's

better than nothing take care