Financial Sense Newshour recently spoke with CPM Group's Jeff Christian, one of the most accurate strategists and forecasters on precious metals and commodities, to hear where he thinks gold and silver will be trading in 2020.
Jeff spoke on our weekday premium podcast, FS Insider, and told listeners that CPM has issued its first buy signal on silver in years.
For related podcast, see Jeff Christian on Silver Buy Signal, Gold Outlook.
Metal Bull Resuming
Jeff Christian is well known for strategically calling the bottom and top of the last major bull market that started in the early 2000s. Right at the very peak, in 2011, Christian warned that precious metals, especially silver, were in a bubble and about to suffer steep losses. His prediction came true in a matter of days.
Fast forward to today and Christian says the bull market in precious metals has now resumed.
We’re only at the beginning of this bull, he said, and prices will likely trend steadily higher, but not explode to new records on speculative buying as we saw from 2009 to 2011. Instead, price increases over the next couple years will be relatively modest, Christian noted.
That said, CPM Group has issued an intermediate buy signal on silver and discussed his expectation for higher prices in 2020.
Looking out over the next several years, it is possible that we will see sharply higher silver and gold prices to new all-time highs, Christian added.
Long-term Investors Still Absent
Six months ago in early June 2019, there was almost universal pessimism toward precious metals and precious metals shares, Christian stated. They had underperformed for a long time and were showing weakness in the first half of 2019.
Looking back, it was clear this was a great buying opportunity, as is usually the case when the consensus has soured on an investment and contrarian investors take the opposite side.
Now though, sentiment has become more bullish and if we look at what's happened since June, most of the buying that pushed prices up has been in futures, options and forward markets rather than in actual bars or coins.
This is a short-term cautionary signal for him because it indicates to him that longer-term investors are playing less of a role compared to more financially-oriented speculators.
“Prices have been driven higher by futures and options buying from more short-term, opportunistic investors,” Christian said. “We really need to see long-term investors start to come back and buy physical gold and silver...before we can really see the gold price and the silver price start to move substantially higher.”
Christian also discussed his thoughts on the political race, government deficits, and a wide range of topics that will have an affect on metals prices in 2020. For the full audio interview, log in and go to Jeff Christian on Silver Buy Signal, Gold Outlook. Not a subscriber? Click here for more information.