In this presentation, Jeffrey Christian of CPM Group discusses the gold price outlook, silver’s breakdown below $60, inflation, election risks, and why a further precious metals selloff could be followed by strong investment demand and higher prices.

With gold trading around $4,197, prices have remained largely within a $4,050 – $4,200 range over recent weeks. Jeff explains why the longer this consolidation continues, the greater the possibility of a sharp downward move. CPM would not be surprised to see a selloff followed by renewed buying and a decisive break above $4,200.

Some investors are still waiting for gold to fall below $4,000 before buying. CPM expects strong investment demand if those lower prices arrive. Other investors have already been adding metal: gold ETF holdings increased by approximately 3 million ounces in August and another 2 million ounces in September, even as prices fell during September. Jeffrey also discusses reports of strong physical demand from dealers around the world.

Silver has shown greater weakness, breaking below $60 and trading around $55.77 during the presentation. Jeff reviews the downside risk CPM discussed earlier in the week and explains why silver is behaving differently from gold. Gold attracts broader demand as a financial safe haven, while silver’s larger industrial-demand component faces pressure from substitution and reduced silver use per product at elevated prices. CPM nevertheless believes silver could rise sharply.

Jeff also looks how post election uncertainty, persistent inflation, rising interest rates, Treasury financing plans, and stock market risks could influence gold and silver prices. He reviews platinum’s support near $1,600 and palladium’s exposure to weaker automotive and electronics demand. CPM expects continued volatility and possible further near-term declines, while remaining more constructive on precious metals prices over the next several months.

Courtesy of the CPM Group