Jeffrey Christian: From Boom to Bust, Anticipating Gold’s Role in a Global Economic Downturn

In this episode of Palisades Gold Radio, host Tom Bodrovics speaks with Jeff Christian, Managing Partner of CPM Group. Jeff discusses his background and what brought about the creation of the CPM Group. CPM Group's research department was established in the late 1960s to gather data and estimate supply and demand for gold and silver as the gold standard was ending and silver was being removed from coinage and currency systems. The company has a strong track record of accurately projecting prices due to their continuous gathering of data and maintaining a global network of contacts. Jeff discusses the recent demand for gold from investors has been high, with net investment demand for physical gold totaling 25, 26, and 24 million ounces in the last three years. This level of demand tends to cause an increase in gold prices, as seen by record annual average gold prices every year for the past four years. The price of gold has increased significantly since 2000 and is expected to continue to rise in 2024 and 2025 due to several macroeconomic drivers. Despite inflation coming down and interest rates rising, investment demand for gold remains strong. Governments and central banks are buying gold to diversify their reserves and reduce reliance on the US dollar. China, in particular, has a growing appetite for gold due to centuries of political disunion and civil wars, making the yellow metal a safe haven for them. Jeff discusses the impact of The Shanghai Gold Exchange in taking some market share from London, with Chinese investors paying higher premiums for gold compared to the West. The Chinese currency's lack of free trade also affects gold prices in the country. While some gold has moved to China, there are still multiples of the amount of gold built up in Switzerland over the last 10-20 years. The amount of gold being mined is down somewhat from its peak due to reduced exploration and development spending during a period of lower gold prices. However, higher gold prices in recent years have led to an increase in investment in exploration and development. The capital markets tend to be short-term and cyclical, which can create challenges for long-term financing needs in the industry. Lastly, Jeff discusses the lack of interest from investors and speculators in gold miners is due to a range of issues, including changes in the equity markets and institutional investment practices. The gap between the performance of smaller companies and large companies has never been wider, making it more challenging for smaller mining companies to access capital. CPM Group's 2024 Gold Yearbook provides in-depth information on the gold market and its trends, including charts and valuable historical data not found elsewhere. Time Stamp References:0:00 - Introduction0:30 - CME Research History7:18 - Recent Gold Demand10:10 - Main Macro Drivers12:48 - CME Gold Outlook17:44 - Fed Rates Normalizing?20:12 - U.S. Debt Servicing29:16 - Dollar & Euro Demand31:38 - Dot Plots & Projections33:10 - Gold & Election Uncertainty36:48 - Media Narrative Divide38:40 - Impact of Bitcoin40:30 - Demand During Crisis?44:42 - Lower Rates & Gold?47:34 - China & Gold50:55 - Shanghai & Pricing54:14 - Production & Demand55:20 - Miners CapEx & Supply59:58 - Silver's Role1:01:02 - Strategic Role?1:04:15 - CBDCs & Hyperinflation1:10:32 - Wrap Up Talking Points From This Episode * CPM Group's gold research spans 30+ years, providing unbiased data & analysis. * Outlook for gold through 2024/2025 and why demand remains high. * Thoughts on the Dollar, Treasuries and the long-term debt of the United States.