How High Will Gold Price Go In 2025? Investors Face Greatest Risks Since 1941 | Jeff Christian
Summary
Start earning interest in gold: https://Monetary-Metals.com/Lin Jeff Christian, Managing Partner of CPM Group, gives his outlook on …
Transcript
The risks that the world and individuals living in the world are facing and the anxiety and uncertainty are greater today than any time since August or December of 1941 and they are greater today than at any time since then. What is then your updated I guess average price for 2026? But before then um maybe where gold may end by the end of the year this year 2025. Jeff Christian, managing partner of the CPM Group, returns to the show. He's going to help us make sense of the precious metals markets. What's going on, Jeff? Welcome back to the show. We're going to get your outlook, your updated outlook on gold and silver given that uh well focusing on gold first before we get to silver. gold has beat your expectations for 2025. We'll talk about that. So, welcome back. >> Yeah, it's good to be back. It's been a while since we spoke. >> Yeah, I I believe it was before May uh midappril 2025. Time flies. Please excuse the window washers behind me. They're doing their work and I don't want to wait for them, but I guess this validates the fact that I have a real background, not a fake one as some people online speculate. But, uh Jeeoff, it's good to see you. I watched one of your um videos that you posted on your own channel. CPM Group, by the way, has a YouTube channel linked down below. Check it out. Uh they post regular market updates. Yesterday on the 22nd of September, you released a video called Gold Hits new high. Don't sell yet. And you're comparing gold and silver to a runaway train. And you're saying, well, you're not advising investors to sell yet. Don't stand in front of a runaway train. So when does this train stop? is I think the question on a lot of people's minds. >> The big question is yeah when you know uh when does it stop and the answer that we have and I think most people have is who knows but it's probably well beyond 2026. You know, our expectation has been all along that the gold price would be rising in through 2025 into 2026 uh and would reach new levels in 2026, maybe going into 2027. And the big question that we keep getting asked by our our investor clients and others is you have the price, you know, plateauing and maybe even declining at some point between beyond 2027. Why, you know, if if you look at why the gold price and silver price have been rising over the last five, six years, uh what is it that's going to change that would cause investors to stop buying as much gold and silver as they have been and for the price to stop rising if not decline? And and that's, you know, that's the that's the big question. And the answer is we don't necessarily see, you know, there's this complex set of economic and political conditions that have been driving investors to add to their gold and silver holdings. We don't necessarily see that getting better. So we could see the gold prices and silver prices rising for an extended period of time and they may plateau sometime beyond 2027 but depending on the economic and political circumstances at that time they may not decline. They may just sort of slow down simply by virtue of the fact that they are much higher. >> If you're looking at other macro variables and I'll get to your new gold price and silver price projection in just a minute. your update. If you take if you take a look at the dollar for example, the dollar hasn't, you know, collapsed or anything like that. It's certainly not done well this year. It's it's it's had a it's it's well it's it's fallen from 109 110 to all the way down to 97. So, it's not great, but we're not talking about the collapse of the dollar here happening. Um certainly not in real time. Uh the 10-year yield isn't collapsing. And so, uh the stock market is reaching new all-time highs. It's just euphoric sentiment for risk on right now with the stock market. So what what's driving this ascent for gold, this runaway train? What what what's pushing this? >> It's actually, you know, some of those factors are factors that are driving investor demand for gold and silver. But yeah, if you look at the dollar, the dollar's off like 8% from its peak at the beginning of this year. But if you take a longer term view, it's still up like 10% or more from its 2021 low. and it's up something like 40% from where it was in 2011 at the end of the great recession and the global thing. So, you know, the go the dollar price is not collapsing despite what you know the promoters say uh it is. Uh and that's actually a positive for gold because gold and the dollar are and and silver to a third extent to to a lesser extent. These are the assets that investors go to when they're worried. So you're seeing a situation right now where gold and the, you know, the dollar are rising. The dollar, while it's off from the beginning of the year, it's higher than it's been for most of the time going back to like 1985 or so. So, you know, you've got a strong dollar, you've got strong investment demand for gold. Uh interest rates are holding up well. Inflation is still a problem and the inflation causes investors to buy gold and silver, but the inflation also causes interest rates to stay higher than they would be. Uh again, you're not seeing people run away from uh treasuries. There isn't a a global uh dumping of treasuries. the the dollar value of treasuries held offshore from the United States are at record levels and they've been rising about 10 12% a year for the last several years. Again, it's that safe haven asset. Uh and the stock market's rising and you know gold does very well in the late stages of an economic expansion, in the late stages of a equity bull market. That's when investors are feeling very wealthy with their equity positions and very nervous about what could happen to those equity positions. So, you know, when the stock market's down, investors kind of poor and equities look good on a cyclical technical basis. When the stock market is high, investors feel very wealthy and very vulnerable to a decline and they tend to take some of their profits out of stocks and cycle it into gold and silver. That's one of the things that you've been seeing over the course of say the last 9 to 12 months. >> One other explanation I've heard is that people or the gold market in particular sniffing out higher inflation. I don't know if that's true. I'll let you comment on that. If you take a look at the TIP ETF, this is the uh uh ASA's TIPS bond ETF that tracks the TIPS, the Treasury Inflation Protection Security, which is an index that tracks inflation. It's been up on the year about 5% year to date. Nothing dramatic, although inflation expectations have been ticking up since the beginning of summer, especially with coinciding with higher inflation CPI print. I is there higher inflation expectations baked into the gold price? I'll let you answer that. It's funny because a lot of people are very a lot of gold investors and silver investors are very much worried about high much higher inflation. We see inflationary pressures uh a number of inflationary pressures as does the Fed and and other people and I think that Paul may have even given a speech earlier today in which he said we cannot take our eye off the inflationary pressures that are existent in the economy. There are really strong inflationary pressures in the economy. Inflation overall, you know, these headline inflation figures have been restrained by lower oil pre. So lower gasoline and lower heating oil have kept the price the the overall price indices and the tips price uh which is based on them uh off. But if you look at if you disagregate the inflationary pressures, there are a lot of inflationary pressures especially in the service sector of the IND uh of the economy. And so there are still big inflationary pressures and those are affecting they're affecting you know they're stimulating investment demand but they also limit overall economic growth which limits the stock market's attractiveness and they tend to have an effect on nominal Treasury bill rates pushing them higher making them more attractive. So, you know, it's a complex set of factors that interact with each other that all combine to cause investor anxiety which is really high right now and it's being reflected in investors moving a lot of money into gold and silver. >> Yeah. Okay. Uh well, how do you explain this phenomenon? The real interest rate here we have the 10-year real interest rate coupled with gold. Historically, gold has moved inversely with the real interest rate, which I suppose logically makes sense. As the real interest rate rises, you would want to seek yield uh in yield bearing products. As a real interest rate decreases, and there is no yield to be found, you would want to go into a hard asset like gold. However, they've been moving in tandem ever since last couple years, but that that move upward has been more pronounced of late. Uh how do you explain that? Well, if you look at it historically and go back to like 1970 when gold prices were really just first freed in 1968 to float, the change the month-to-month changes in real interest rates and month-to-month changes in real gold prices is a negative 16%. So, the idea that they move closely in opposite directions doesn't hold up to statistical scrutiny. There are times like now where the higher interest rates uh the higher real interest rates reflect somewhat lower inflation than what we saw in 2021 2022 but it also reflects the fact that interest rates are relatively high from a recent historical figure and again you're looking at recent data. If you look at nominal and real interest rates on a longer term basis they're still relatively low. Um but you will find as I said earlier that in this kind of le era of extreme anxiety on the part of investors institutional and individual investors around the world. You know, the the first thing that you do was you you run to gold, silver, the US dollar and US treasuries because for all of the warts in the US Treasury and all of the $ 37 trillion of debt that the US Treasury has, they have a better credit rating and credit risk than any other sovereign debt and commercial debt and private debt. So, they're the they're still the go-to asset, and that has been driving the the the interest rate higher. >> Gold is now above $3,600 an ounce, an unprecedented level. Now, you've heard me talk a lot about how gold and silver are smart ways to grow your savings over time. But what if I told you you can now do more than just hold gold? What if you could also generate income from it? Well, that's exactly what today's sponsor, Monetary Metals, is doing. They're redefining how people invest in gold and silver. Instead of paying to store your metal or letting it sit idle, now you can get paid to own it. Right now on their marketplace, you can earn up to 4% yield on gold paid in gold. That means your savings grow in actual ounces, not dollars, on top of any price appreciation. Yield is deposited monthly in physical gold, which you can redeem and take delivery of. Thousands of investors are already generating a consistent yield in silver and gold. So, it's about time you look into this as well. Go to monetary-metals/lin link down below or scan the QR code here to learn more. Going back to the gold price now, uh at $3,800, well, $379, so close to $3,800 today. We're speaking today on the 23rd of September. Gold's up exactly 100% since 2023. So, in less than 2 years has climbed, it's doubled. Um, this is not something that you would expect of something that is has been historically labeled a safe haven asset. It's happened before in the past. Of course, if you take a look at what happened in 2011, uh, it was also up about 100% in the span of well, it took a bit longer than that, longer than 2 years to reach 100% peak in 2011. Does this period right now feel like 20110 2009 to you? >> It does to some extent. Yeah, it does. It also has characteristics similar to those that we saw in 1979 uh when the gold price and silver prices and oil and copper and everything else were rising sharply. There are distinct uh there are differences that are important to note but there's very similar uh to the great recession and global financial crisis that occurred in 200 well the great recession was 2007 to 2009 and then there the global financial crisis was 2007 to 2011 really yes uh and and there it's very important because if you look at gold and silver prices relative to that period perod of time. They bottomed out gold in 2000, silver in 2002, and they started rising in 2002, 2004. They rose, you know, we didn't get into a recession. We didn't get into a severe financial crisis until late 2007, early 2008. Uh, but you had gold and silver prices rising for five years prior to that. And gold and silver prices bottomed out and started rising in 2019. uh roughly five years from uh ago. And the other the important point I think is that as I said the recession ended in 2009 but gold prices continued to rise and they met their they made their peak in 2011 and that was because of the sovereign debt crisis in Europe and in the United States. and you had this downgrading of the US Treasury credit rating for the first time ever in August of 2011 and the gold price peaked in September of 2011. And and so the similarity is really interesting because in that period of time you had gold and silver prices rising before for five years before the recession through the recession and for two years after the recession because there were other factors driving investment demand and I think that that's very important. You know, right now we're we're working on our long updating our long-term economic outlook as well as our gold and silver 10-year projections. And and one of the issues is are we on the threshold of a recession or might the recession be later than we had been thinking? Um and and so there's this whole issue that we have to wrestle with in our reports which is the relationship between gold and silver investment demand and prices and recessions and the fact that it's not just recessions and it's not just inflation uh that determine whether or not investors want to buy more gold and silver or less gold and silver. That leads to my next question is what is gold's role in 2025? So in 2011 when you talked when you were talking about uh the sovereign debt crisis in Europe I remember at that time when um credit default spreads were just corporate spreads spreads overall were widening across the board and it was very obvious that uh the bond market was sniffing out some sort of distress uh even before the crisis actually transpired. gold coincided with that and so gold was viewed at the time as a flight to safety away from uh debt assets. We're not seeing corporate spreads widened to the same extent if if if if anything right now. So um >> right is is we're we're looking at a different narrative. Is a paradigm shift for gold? Is it a different role now in our portfolios versus 2011? what we're seeing is a whole range of issues and and in terms of the credit spreads, you know, we're in a situation right now reminiscent of say 1985, 1986 and then again in the '9s uh when Fed Chairman Vulker and then Fed Chairman Greenspan, Greenspan famously said, I believe it was in the 90s that the market was wildly under uh valuing credit risk. and you had a very small spread between say treasuries and corporate bonds and and and municipal bonds and you're seeing a similar situation right now. If you're a large corporation, you can borrow an enormous amount of money at relatively cheap rates. If you're a smaller corporation or a private non-publicly traded corporation, you're paying much higher rates. But in terms of the published rates that large corporations have, the credit spread is very low. The market seems to be underpricing credit risk right now at this point. That said, you also have a lot of people investors who are who are not underpricing the risk and they're saying, "Okay, this is this is a dangerous situation. It's similar to what thing times what we've seen before. We have to be extremely careful." If I look at what's driving gold prices right now, I think the biggest issue is political risk. Uh there's also economic risk, concerns about recession, concerns about rising unemployment, concerns about overall economic growth. Uh the inflation is still there. You know, it's relatively restrained on a headline basis, but there are a lot of inflationary pressures and there are a lot of changes in government policies, tariffs, immigration, and other factors that all carry with them enormous inflationary conditions. You know, we got a notice from one of our clients in the jewelry district here in New York yesterday, and they sent a notice to everybody on their mailing list. They said their prices are going up 15 to 25% October 1st, next, you know, th Wednesday, but because of tariffs and because of other factors, but you're seeing inflationary pressures from the immigration policies, you know, you have you have crops rotting in the fields, meat packing companies that can't process the meat. They're at running at 25 capac% capacity because not only illegal immigrants are afraid to show up, but legal immigrants and anybody who's Hispanic is afraid to go out. You've got people actually making grocery runs for Hispanic people who are afraid to be walking down the street right now because they could be grabbed off. Even legal immigrants feel that way. Even Prince Harry apparently feels that way. So you've got a lot of constraints and you have a lot of inflationary pressures. Most of the big beautiful ter uh bill budget bills cuts are skew skewed to kick in after the bi-election next November in the United States because they realize that if you start cutting Medicaid and social security and Medicare before the November elections next year, you probably see the Republicans losing control of the House or andor the Senate. So they have scheduled these things for the most painful cuts to occur after next year's election. That means that you're not going to see a sharp drop. You're not going to see $2 trillion cuts in government spending now. You're going to see it spread out over what turns out to be two years, 2025, 2026, 2027. That stretches out the period of economic pain and it stretches out the period of time where investors and corporations and consumers are all concerned about the economic outcome. >> Yeah, I would uh love to see the headline if Prince Harry ever gets uh detained uh accidentally. Anyway, uh let me um just circle back to inflation. You said uh many stores are about to raise prices. The big box stores have announced this already. Home Depot, Macy's, I was reading uh um and uh and uh and other other discretionary stores. I wonder how sticky this inflation is this time around. In other words, let's suppose Trump were to reverse some of the tariffs like he's done many times this year. >> Can we see prices revert back? In other words, people actually drop prices because demand is maybe weak. As I said earlier, the big inflationary pressures that we're seeing are in the service sector, not so much in goods. So, it's not so much a factor of tariffs, it's it's other factors that are kicking in. and and and in the service sector obviously uh labor costs are even more do predominant in determining pricing than in the manufactured or consumer uh you know in in in what the the BLS calls commodities things and and those price increases are much more sticky and they're across the board they're in they're in housing services, they're in medical services, they're in financial services, and they're in general services, too. And food distribution, uh, and transportation, and those prices tend to be stickier than consumer, you commodities or things. and and so Trump waffling or tacoing or whatever you want to call it on tariffs has a less prominent effect in ameliorating the inflationary pressures that we're watching in the economy. >> So going back to gold, who's doing the buying? You mentioned there's probably some rotation from uh stock markets into gold. Uh well the stock markets are hitting new all-time highs so maybe not everyone is doing that. Uh who is buying gold right now and I'm asking this because I'd like to understand what would motivate them to stop buying gold? >> We are seeing strong demand for gold in most parts of the world with institutional investors high net worth individuals family offices in North America. Gold investment tends to be for the top 20% or top 10% of the population because, you know, the bottom 50% of the population doesn't have enough discretionary money, you know, if to to buy an ounce of gold. You know, you're going to suck up your your light your your your savings account if you buy an ounce of gold. So, but we're seeing more investors buying gold in more demographic areas and it's really global. We're seeing strong investment demand. I was just in India. Uh and investment demand is up, jewelry demand is down. Uh our Chinese partners tell us that investment demand is is up, but jewelry demand is down. You're seeing strong investment demand in Europe and you know in the top 20% of the population in North America. So it's pretty much general on a global basis. Looking ahead now, do you still see a recession, going back to a recession call, a recession being uh a primary driver of the gold price going up or perhaps an expectation of a recession? You did call on my show uh in the past that a recession is in the cards at least for the CPM group. >> Yeah. The reason I pointed that out earlier in the about the period from 2002 to 2011 2012 is exactly why it's not just a recession. And if you look at the relationship between gold and silver price increases and recessions. 1979 gold and silver prices rose. The recession didn't start until 1980. um the the Audi gold and silver started rising 2000 2002 2004 the recession didn't set in until the end of 2007. So you can have this period of time where the prices rise in anticipation of a recession because they're reacting not only to fear a recession but they're reacting to higher interest rates, higher inflation, the factors that cause economies to tip over into recessions. higher unemployment, slower employment, uh slower job creation, all of those factors tend to emerge before recession and the gold and silver investors tend to and see that anticipate recessionary conditions. If I look at the market right now, I don't see in I see investors worried about infla recession buying gold. I see investors worried about inflation buying gold. I see a more investors worried about the economic and political stability of their region, their nation, their their their local and the world. So you see a lot of safe haven buying that is, you know, and we've seen this especially in the last two days. You know, the gold price rose from 3650 to 3,800 in the last two days. And and you're seeing when you start saying, well, what were what was it? Was there an economic indicator or something that caused investors to say I better buy more gold? And the answer is no. It's accumulation an accumulation of anst economic and political anst listening to all of the stuff going on in the world and in the United States and in individual countries. You know, you have the Frenchy uh government having problems uh with its population not liking it. It's a universal thing. So there's this accumulation of concerns and you know one of the things that we've been saying is the risks that the world and individuals living in the world are facing and the anxiety and uncertainty are greater today than any time since August or December of 1941. Bill, once the US entered World War II after Pearl Harbor in December of 1941, it was clear who was going to win. How they'd win and how much time it would take, that was a different question. But the risks facing the world declined after December 1941 and they are greater today than at any time since then. And that's being reflected investors buying gold and silver globally. There's two theories I'd like to pose uh to you uh Jeff and see if either of them make sense. The first is that the Fed is losing independence. This was actually circulated by um some institutional investors. Goldman Sachs ran a report about how gold is going to go to $5,000 because of this. The Fed losing independence means more money supply uh means more perhaps inflation uh because of lower rates and perhaps more money supply. Uh that's number one. Um and there's perhaps evidence of the Fed losing a dependence if they were not already uh dependent in the first place. Uh the second is uh perhaps gold is just a risk-on asset. Right now there's more risk on appetite than one might think and so investors are just putting their money everywhere as we saw in 20 2020. Although back then we had QE and not so much now. Do either of those theories make any sense to you? Uh the first one makes a tremendous amount of sense and it's important because it's both a shortterm factor that we clearly see driving investment demand on a short-term basis, but it's also on a long-term basis. And it's not just the Fed. Governments around the world are trying to put the screws on their central banks. and central bank independence has been proven to sh to statistically to be a very good thing for long-term economic growth and fighting inflation. So, the Fed losing independence and fears thereof and the blatant way that the Trump administration is touting that they want to do that and the stoogge that they put into the Fed, who clearly, you know, slept through economics 101 in high school. Um all of that is contributing to the current purchasing and it's very worrisome because it's a very much of a long trying thing. You know Fed independence is like virginity. You lose it and it's going to be very hard to convince someone that you've gotten it back. You know so that's a big one. Uh the second thing that you were talking about was yeah there's a lack of QE2 but there's more money today more investment money and a higher percentage of investable funds in cash today than in my memory going back to the 70s. You know so there's a surfiate of money as you said looking where do we put this? Well you look at the stock market it's overvalued. A lot of the overvaluation is is limited to probably 10% or fewer of the comp companies in the stock indices. A lot of companies are actually sucking wind, but the indices are being pulled up by a few companies. Uh so there's a lot of risks in the stock market right now and and in that kind of situation you you see that going on. Now I mentioned earlier you know we're wrestling with the issue if we have been right for the last several years and the gold and silver prices reach a plateau 2027 2028 2029 do they fall or do they plateau and the the difference is it's going to depend on the economic environment. If we actually saw economic and political circumstances improve in 2027 2028, then you could expect prices to decline the way they did in 2012 to 2015 and 1980 to 1990. If they don't fall, uh if the economic and political circumstances don't improve, but the investment community normalizes it and becomes inner to it, then the prices plateau and they don't fall as much. So that's our long-term view. >> Let's take a look at uh Fed policy. Speaking of the Fed, so Chair Powell is still head of the Fed. you know, we can discuss what may happen once he isn't. Today, he made an announcement while he was talking at a speech in Rhode Island and he said, "We do look at overall financial conditions. We ask ourselves whether our policies are affecting financial conditions in a way that it is what we're trying to achieve." But you're right, by many measures, for example, equity prices are fairly highly valued. Um, why would the Fed make an emission like that? And what does that mean for monetary policy? >> Well, it means that uh Paul is a realistic and honest person because if he said that they didn't pay attention to the stock market and he had no idea if the stock market was fairly valued or overvalued, people would say, "Well, he's just lying, right?" But Pal doesn't lie. So he says, "No, look, we obviously pay attention to the stock market the same way we pay attention. Have you ever read the blue book, the beige book? I mean, you to they look at every aspect of the economy, including equity markets, including bond markets. Their Fed pol the Fed policy is focused on short-term interest rates, but they're painfully aware of what long-term rates are doing. And most of the consumer and industrial borrowing is in the long end of the maturity spectrum. So they pay a lot of attention across the economy including the stock market. And for somebody to say, well, I don't pay attention to the stock market is disingenuous. And this guy's been a pretty much of a straight shooter, I have to say. Well, he also noted this is not a time of elevated financial stability risks, noting that perhaps Yeah. What do you make of that comment? Is he right? >> Well, it's not for them. I mean, like I said, you know, you're seeing larger holdings of US dollars and Treasury securities around the world than ever before because the sovereign risks elsewhere are much greater than they are for the United States. So he may be seeing less elevated uh monetary risks but the world is not seeing that which is why he's seeing less because again you know the dollar is like your mama you know you you'll sit on the schoolyard and and you'll talk trash about the dollar and dollar is no good but when you scrape your knees you run to your mama and ask for a band-aid and that's what the dollar is and that's what treasuries are and the Fed's running that. I mean, I I'm sure the Fed I know the Fed because they've said it uh repeatedly. They're not happy with the fact that they are the borrower of or the finance year of last resort for the US Treasury and US government and that the US Treasury and the US government says, "Oh, deficits don't matter. We'll just borrow from the Fed." U they don't like that. I mean, they have, you know, they've been saying, "Don't do that." since Paul Vulker in the early 1980s and the government has clearly ignored them for 40 some odd years. Uh but you know that's the economic reality. >> The Bank of Canada also cut rates uh this past week. Uh one of the reasons according to the Bank of Canada website is that the government's recent decision to remove most retaliatory tariffs on imported goods from the US will mean less upward pressure on the prices of these goods going forward. I bring this up because it seems like central banks are now closely watching uh tariff policy and so let's just tie everything in. What is your expectation for what is ultimately uncertain which is tariff policy and what is your expectation for how the Fed may react to tariff policy and then we can make a you know deduction as to what that means for markets. Well, I think the Fed and other central banks have to be more accommodative because reality is that tariff policies are destructive of economic activity. They reduce the amount of money that consumers and companies and corporations and importers and exporters and everybody else in in the in the real economy have. And that is destructive of economic wealth. And so the Fed and other central banks have to be cognizant of that and they have to be more accommodative to compensate for the you know it's a tariff uh it's a tax uh the the reduction in corporate and consumer wealth due to tariffs. You have to be more accommodative unless you want to let the government throw the world into a global recession. >> Right. Okay. So, let's finish off on gold. What is then your updated, I guess, average price for 2026? But before then, um maybe where gold may end by the end of the year, this year, 2025. >> Yeah, we have gold trading around 4,000 by the end of this year. Um, and it's funny because, you know, I guess in in July we were saying that we thought the price could get to 3,700 by by August, uh, by September and it got there in August. And then in August we were saying we thought that the price could get to 3,800 by October. But here we are in the final week of the final full week of September and it's at 3,800. We have gold trading around 4,000 by the end of this year. And we have gold trading around 4,000 4,100 for most of next year. >> When did you update it to 4,000? Was it recently? >> Um, no, it wasn't. It was actually some time ago. >> Interesting. What What changed? What made you more bullish? the momentum itself, >> the level of perceived risk and anxiety in investors plus yeah the momentum in the in metals prices when the when the price rises we uh you know our projections are based on historic prices. So, if the price is $2,600 in January of 2000, well, we don't use annual a we we use annual average prices for projecting annual average prices. The price is $2,00 you know, $400 in 2024 and we're basing it off of that. And now it's late September 2025 and the average price has been $3,300 so far this year. uh approximately 3,200 3,300. So our projections going forward are based on a higher basis, a much higher basis, 40% higher basis. Uh so that's factored in and that has happened mostly since April, but we had prices getting as high as $4,000 probably going back 2019 prior to COVID. uh we were saying that at some point, not necessarily the fourth quarter of 2025, uh we thought that the gold price could get this high. >> Okay. Certainly your clients have been asking you when to take profits. You you you did you did say in your video and actually to me just now, now is not the time to take profits. So, how are you answering clients questions on when? Well, one of the things that we're seeing which is very interesting is, you know, and our clients range from high netw worth individuals to institutional investors. You have to be an accredited, eligible or exempt investor to to to really get into the nitty-gritty of CPM group services. And one of the things that we found that's very interesting is high net worth individuals, family offices, boutique investments, and even large institutional investors in sovereign wealth funds are saying, you know, you told us that the price would rise very sharply into 2025, 2027. The price is where you thought it would be. >> Yes. now a little bit ahead of schedule, but we look at the world and we look at all the political and economic problems and we're not interested in t selling our precious metals and taking profits. >> How much of that is just greed kicking in? >> It's not greed. It's, you know, it's let me, you know, there's a there's an adage among institutional investors. You don't try to buy in the last 10% of the downward move and you don't buy try to sell in the last 10%. If this were if the economic and political environment were not as hostile as it is, a lot of people would say I'll give up the last 10%. I'm going to take profits. You know, I'll give up the last $380 of any upside. If price is $3,800, I'll take profits. But this is not the situation right now. People are saying, "Okay, we're there, but the economic and political environment is much scarier and more hostile to economic wealth than we thought it would be. So, let's stay long because this thing could continue for several more years, the way Jeff said in 2000." And so, one of the things that's happening is people saying, "Help us structure hedges. We want to stay long physical gold and silver, but let us buy some hedges uh in case the price does drop off, you know, and if you look at a gold price chart, you know, the price a month and a half ago, six weeks ago, the price was $3,300. So, let's say that the price drops $500. That's more than a 10% drop, right? So, you can make a lot of money by hedging at this point and by buying a put and if the price goes back to $3,300, you sell the put back and you you're going to take several hundred of profit out of that and lower your average acquisition price. That that's the way you measure your average acquisition price. >> Fair enough. Let's move on to uh some other metals and close off there. Silver. Let's talk about silver. >> Okay. >> So, what's your update on silver? Our expect well you know our short super short-term view was that if the price got to 4590 I think we'd telling our clients that we might want to sell uh I think the prices got up to about 44 uh 70 something looking at the December contract got up to 4477 today um our expectation is that it probably touches $50 toward the end of this year or in the first quarter of next um and then probably rises somewhat higher over the course of 2026 into 2027. >> That's incredible that this year is going to be a retouch of the previous all-time high for silver and then of course a breaking of all records for gold. I'm just I'm Yeah, >> it's I ran across I was looking for some obscure data and I ran across a presentation that I did in late 2020. And in late 2020, we were projecting that the average price of silver could reach $50 by 2025. Now the average price in 2011 was something like $35 an ounce. The average price in 1980 was 20 2022 an ounce. So you know I don't know what we were looking at at co but we were looking at it from our homes because you know in 2020 uh but you know our expectation has been that the price could get this high. That was the peak that we were projecting. And as I was saying earlier about gold, we're now saying, okay, once it gets there, what does it do? Does it come off? Does it plateau? Or does it go higher? >> And we don't have the Hunt brothers cornering the market this time around. >> The Hunts never tried to corner the market. That's a mis that's a that's a misrepresentation of what they were doing and what was going on. If the if it were the hunts trying to corner the market, gold wouldn't have gone from 190 to 850. Copper wouldn't have gone from 60 cents to a$180. Oil wouldn't have gone from $10 to $40. You know, there was a lot going on. The hunt saw it coming and they wanted to ride that wave. And once they built their position, they told their brokers, "Hey, you can feel free to tell everybody you know what we've done." Yeah. The hunts were not trying to corner the market. They saw a supply demand tight market and they expected the price to rise and they they made a couple mechanical mistakes uh which cost them their fortune but they were not trying to corner the market. >> Uh you're yeah uh >> I know because I think >> uh fair enough. Well, the the point I was making, Jeff, is that there's no perhaps there isn't an artificial supply squeeze happening right now that's going to push silver up. It's just naturally happen happening along with the other commodities right now. Is that what we're trying to say? >> Yeah. I mean, you know, the silver silver market's well supplied and uh you know, it's it's weird because you hear people talk about how we're running out of silver, but you know, the COMX inventories are five times what they were three years ago. They're double what they were historically back in the 80s and 90s. Uh London stocks are down from their COVID peak, but they're triple what they were estimated to be back in the '9s. Uh, Shanghai stocks are up. You've got 2.5 billion ounces in silver bullion coins. You got a billion ounces in ETFs. There's a lot of silver around. So, um, it's it all comes down to investment demand. >> How would you describe 2025? Let's suppose let's go forward in time a couple years. Let's say it's 2028 now and you and I are talking again in three years. And I ask you, hey Jeff, let's do a little quick history lesson for the audience here. How would you describe 2025 in terms of themes? So 2020 prices moves dramatically because of COVID and subsequent Fed policies. Well, not just Fed, but central bank policies around the world. We can go back in time to 2008. Talk about the great financial crisis. What happened this year that pushed prices for everything up to new all-time highs? How would you describe this year? >> I guess I'd probably say something like, well, you know, before the war, David. >> Yeah. Yeah. >> Okay. Wow. So, you're expecting some sort of major conflict. Is that >> they're here? You know, we're seeing the major conflicts and we're seeing major changes. You know, there are scenarios that we have talked about internally for decades that we've never mentioned to our public that are now on the cover of the Economist and Time magazine. You've got, you know, I mean, what is that Jeff? If I were Vladimir Putin and I wanted to destroy the United States, I would have no better weapon than Donald Trump. Yeah. And Donald Trump is sitting there saying, "Okay, I'm acting as if I'm upset with Russia because of its Ukrainian invasion. So, I'm going to put tariffs on India, but I won't put any tariffs, real strict tariffs on Russia." Right? and he's toying up to China privately. He's toading up to Russia. And he has shown a proclivity, an attraction, a fatal attraction if you will, to authoritarian figures uh like his daddy uh before. Uh and so you have to really worry about him and all the people around him. And you know, Putin right now, as we speak, last night, you know, he's pushing buttons in Eastern Europe. He's flying drones over Poland and Romania and Denmark and Norway. He's flying fighter jets over Estonia. He wants non US NATO to say, "Okay, this is it. We're going to shoot some stuff down if you cross the border." Knowing that the United States under Donald Trump will say, "No, no, no, no. We don't want to do that." He's trying to create a a a break between the United States and the rest of NATO and Trump's going along with him. >> So, let's suppose, >> okay, >> put it this way. Donald Trump was right when he said he could end the Ukraine war in 24 hours. All he has to do is say to the Ukrainians, you can use the weapons that we put in your country. Donald Trump was right that he could solve the Gaza war, too. All he has to do is stop sending offensive weapons to Israel. But he hasn't done either of those things in 9 months. >> So bottom line is you see these conflicts prolonging if not exacerbating thus helping the gold market. >> Yes. >> By the way, uh on the just very interesting talk here on the NATO front, let's suppose Putin gets his way. there's a rift between uh Europe uh and the US or just US and other NATO allies. What happens then? I mean, does Europe still uh band together on their own and form their own kind of alliance and fight Russia >> or does Russia have confidence to expand westward? Look, you had you had programs in play. You have programs in place in Europe and Canada, the the rest of of NATO to continue as NATO without the United States. And they have been making plans about this for years and they are taking steps to in insulate themselves from the negative consequences. should the United States pull away from NATO and and those con you know the the plans include uh who's going to replace the US military at Monz uh NATO headquarters outside of Brussels uh the United States military was also making contingency plans and actually said in public you know there are constitutional ways where the military can not do things that the president orders them to do. They said that in the first Trump administration and so in the first two weeks of the current Trump administration all of the highlevel military were replaced because they had indicated that they would not necessarily go along with unconstitutional actions ordered to them by the president. All right, we have to close off now and um well, we'll finish this discussion another time. Let's talk about platinum before we end the conversation. We mustn't forget that the PGMs did very well as well this year. Uh alongside gold, platinum itself is up 63 64% depending on the start and end date year to date. So, what happened with platinum this year? I think what happened with platinum was that you as you said earlier they you know people are sort of putting money wherever they can and gold and silver were rising. Platinum was you know platinum has traded between $800 and $1,100 for most of the period of time from 2015 into June of this year. In late May, you saw a platinum marketing uh group come out with a report that said there's a massive deficit, which there's not. Uh and that you had a big surge in platinum imports into China, which you did not on a on a annual basis. On a month-to-month basis, you did because in imports fell very low in January and then they re rebounded in March and April. So they were up from one month but it they were actually down from March and April 2024. Uh and that the jewelry industry jewelry demand demand consumer demand for platinum jewelry was extremely high in China. Although the major importer of platinum to the chi Chinese jewelry industry in their report said, "We've seen a lot of demand for platinum from the jewelry industry in China, but we think it's mostly going into inventories in the jewelry industry and not into jewelry that's being sold on to consumers." So, you had a really interesting hypy marketing story that came out at the end of May. A lot of investors jumped into platinum and they took it from $1,000 to $1,500. >> It has nothing to do with changes in the car industry and perhaps a shift back into um petrol uh from EV mandates. A lot of car industries or a lot of car companies rather in the industry are saying no no we're not going to go all EV. Yeah. >> Yeah. There are some fundamentals that are real that are positive for platinum. One is that there has been a slowdown in non-Chinese uh conversion to electric vehicles which has increased platinum demand somewhat uh in the auto industry. But a bigger thing is been reductions uh in South African production. >> Okay. All right. Great. Let's leave it here. Jeeoff, a very thorough discussion. So I thank you for your time. Where can we learn more about you and CPMgroup? >> cpmgroup.com. www.c cpmgroup.com's our website. You there are a lot of free reads and free videos. You can go to the YouTubetubes. There are hundreds of CPM group videos. We do them. We try to do them twice a week, Tuesdays and Fridays. Uh we did this week's on Monday because today is Rashashana. Um and um those are the two uh public waves and then you can always send an email to info@cpmgroup.com saying let's talk. >> All right, we'll put the links down below. So make sure to follow Jeff and the CPM group there. Thank you again, Jeff. Have a great week and we'll speak again soon. Take care. >> Well, thank you. Take care. >> Thank you for watching. Don't forget to like and subscribe.
How High Will Gold Price Go In 2025? Investors Face Greatest Risks Since 1941 | Jeff Christian
Summary
Start earning interest in gold: https://Monetary-Metals.com/Lin Jeff Christian, Managing Partner of CPM Group, gives his outlook on …Transcript
The risks that the world and individuals living in the world are facing and the anxiety and uncertainty are greater today than any time since August or December of 1941 and they are greater today than at any time since then. What is then your updated I guess average price for 2026? But before then um maybe where gold may end by the end of the year this year 2025. Jeff Christian, managing partner of the CPM Group, returns to the show. He's going to help us make sense of the precious metals markets. What's going on, Jeff? Welcome back to the show. We're going to get your outlook, your updated outlook on gold and silver given that uh well focusing on gold first before we get to silver. gold has beat your expectations for 2025. We'll talk about that. So, welcome back. >> Yeah, it's good to be back. It's been a while since we spoke. >> Yeah, I I believe it was before May uh midappril 2025. Time flies. Please excuse the window washers behind me. They're doing their work and I don't want to wait for them, but I guess this validates the fact that I have a real background, not a fake one as some people online speculate. But, uh Jeeoff, it's good to see you. I watched one of your um videos that you posted on your own channel. CPM Group, by the way, has a YouTube channel linked down below. Check it out. Uh they post regular market updates. Yesterday on the 22nd of September, you released a video called Gold Hits new high. Don't sell yet. And you're comparing gold and silver to a runaway train. And you're saying, well, you're not advising investors to sell yet. Don't stand in front of a runaway train. So when does this train stop? is I think the question on a lot of people's minds. >> The big question is yeah when you know uh when does it stop and the answer that we have and I think most people have is who knows but it's probably well beyond 2026. You know, our expectation has been all along that the gold price would be rising in through 2025 into 2026 uh and would reach new levels in 2026, maybe going into 2027. And the big question that we keep getting asked by our our investor clients and others is you have the price, you know, plateauing and maybe even declining at some point between beyond 2027. Why, you know, if if you look at why the gold price and silver price have been rising over the last five, six years, uh what is it that's going to change that would cause investors to stop buying as much gold and silver as they have been and for the price to stop rising if not decline? And and that's, you know, that's the that's the big question. And the answer is we don't necessarily see, you know, there's this complex set of economic and political conditions that have been driving investors to add to their gold and silver holdings. We don't necessarily see that getting better. So we could see the gold prices and silver prices rising for an extended period of time and they may plateau sometime beyond 2027 but depending on the economic and political circumstances at that time they may not decline. They may just sort of slow down simply by virtue of the fact that they are much higher. >> If you're looking at other macro variables and I'll get to your new gold price and silver price projection in just a minute. your update. If you take if you take a look at the dollar for example, the dollar hasn't, you know, collapsed or anything like that. It's certainly not done well this year. It's it's it's had a it's it's well it's it's fallen from 109 110 to all the way down to 97. So, it's not great, but we're not talking about the collapse of the dollar here happening. Um certainly not in real time. Uh the 10-year yield isn't collapsing. And so, uh the stock market is reaching new all-time highs. It's just euphoric sentiment for risk on right now with the stock market. So what what's driving this ascent for gold, this runaway train? What what what's pushing this? >> It's actually, you know, some of those factors are factors that are driving investor demand for gold and silver. But yeah, if you look at the dollar, the dollar's off like 8% from its peak at the beginning of this year. But if you take a longer term view, it's still up like 10% or more from its 2021 low. and it's up something like 40% from where it was in 2011 at the end of the great recession and the global thing. So, you know, the go the dollar price is not collapsing despite what you know the promoters say uh it is. Uh and that's actually a positive for gold because gold and the dollar are and and silver to a third extent to to a lesser extent. These are the assets that investors go to when they're worried. So you're seeing a situation right now where gold and the, you know, the dollar are rising. The dollar, while it's off from the beginning of the year, it's higher than it's been for most of the time going back to like 1985 or so. So, you know, you've got a strong dollar, you've got strong investment demand for gold. Uh interest rates are holding up well. Inflation is still a problem and the inflation causes investors to buy gold and silver, but the inflation also causes interest rates to stay higher than they would be. Uh again, you're not seeing people run away from uh treasuries. There isn't a a global uh dumping of treasuries. the the dollar value of treasuries held offshore from the United States are at record levels and they've been rising about 10 12% a year for the last several years. Again, it's that safe haven asset. Uh and the stock market's rising and you know gold does very well in the late stages of an economic expansion, in the late stages of a equity bull market. That's when investors are feeling very wealthy with their equity positions and very nervous about what could happen to those equity positions. So, you know, when the stock market's down, investors kind of poor and equities look good on a cyclical technical basis. When the stock market is high, investors feel very wealthy and very vulnerable to a decline and they tend to take some of their profits out of stocks and cycle it into gold and silver. That's one of the things that you've been seeing over the course of say the last 9 to 12 months. >> One other explanation I've heard is that people or the gold market in particular sniffing out higher inflation. I don't know if that's true. I'll let you comment on that. If you take a look at the TIP ETF, this is the uh uh ASA's TIPS bond ETF that tracks the TIPS, the Treasury Inflation Protection Security, which is an index that tracks inflation. It's been up on the year about 5% year to date. Nothing dramatic, although inflation expectations have been ticking up since the beginning of summer, especially with coinciding with higher inflation CPI print. I is there higher inflation expectations baked into the gold price? I'll let you answer that. It's funny because a lot of people are very a lot of gold investors and silver investors are very much worried about high much higher inflation. We see inflationary pressures uh a number of inflationary pressures as does the Fed and and other people and I think that Paul may have even given a speech earlier today in which he said we cannot take our eye off the inflationary pressures that are existent in the economy. There are really strong inflationary pressures in the economy. Inflation overall, you know, these headline inflation figures have been restrained by lower oil pre. So lower gasoline and lower heating oil have kept the price the the overall price indices and the tips price uh which is based on them uh off. But if you look at if you disagregate the inflationary pressures, there are a lot of inflationary pressures especially in the service sector of the IND uh of the economy. And so there are still big inflationary pressures and those are affecting they're affecting you know they're stimulating investment demand but they also limit overall economic growth which limits the stock market's attractiveness and they tend to have an effect on nominal Treasury bill rates pushing them higher making them more attractive. So, you know, it's a complex set of factors that interact with each other that all combine to cause investor anxiety which is really high right now and it's being reflected in investors moving a lot of money into gold and silver. >> Yeah. Okay. Uh well, how do you explain this phenomenon? The real interest rate here we have the 10-year real interest rate coupled with gold. Historically, gold has moved inversely with the real interest rate, which I suppose logically makes sense. As the real interest rate rises, you would want to seek yield uh in yield bearing products. As a real interest rate decreases, and there is no yield to be found, you would want to go into a hard asset like gold. However, they've been moving in tandem ever since last couple years, but that that move upward has been more pronounced of late. Uh how do you explain that? Well, if you look at it historically and go back to like 1970 when gold prices were really just first freed in 1968 to float, the change the month-to-month changes in real interest rates and month-to-month changes in real gold prices is a negative 16%. So, the idea that they move closely in opposite directions doesn't hold up to statistical scrutiny. There are times like now where the higher interest rates uh the higher real interest rates reflect somewhat lower inflation than what we saw in 2021 2022 but it also reflects the fact that interest rates are relatively high from a recent historical figure and again you're looking at recent data. If you look at nominal and real interest rates on a longer term basis they're still relatively low. Um but you will find as I said earlier that in this kind of le era of extreme anxiety on the part of investors institutional and individual investors around the world. You know, the the first thing that you do was you you run to gold, silver, the US dollar and US treasuries because for all of the warts in the US Treasury and all of the $ 37 trillion of debt that the US Treasury has, they have a better credit rating and credit risk than any other sovereign debt and commercial debt and private debt. So, they're the they're still the go-to asset, and that has been driving the the the interest rate higher. >> Gold is now above $3,600 an ounce, an unprecedented level. Now, you've heard me talk a lot about how gold and silver are smart ways to grow your savings over time. But what if I told you you can now do more than just hold gold? What if you could also generate income from it? Well, that's exactly what today's sponsor, Monetary Metals, is doing. They're redefining how people invest in gold and silver. Instead of paying to store your metal or letting it sit idle, now you can get paid to own it. Right now on their marketplace, you can earn up to 4% yield on gold paid in gold. That means your savings grow in actual ounces, not dollars, on top of any price appreciation. Yield is deposited monthly in physical gold, which you can redeem and take delivery of. Thousands of investors are already generating a consistent yield in silver and gold. So, it's about time you look into this as well. Go to monetary-metals/lin link down below or scan the QR code here to learn more. Going back to the gold price now, uh at $3,800, well, $379, so close to $3,800 today. We're speaking today on the 23rd of September. Gold's up exactly 100% since 2023. So, in less than 2 years has climbed, it's doubled. Um, this is not something that you would expect of something that is has been historically labeled a safe haven asset. It's happened before in the past. Of course, if you take a look at what happened in 2011, uh, it was also up about 100% in the span of well, it took a bit longer than that, longer than 2 years to reach 100% peak in 2011. Does this period right now feel like 20110 2009 to you? >> It does to some extent. Yeah, it does. It also has characteristics similar to those that we saw in 1979 uh when the gold price and silver prices and oil and copper and everything else were rising sharply. There are distinct uh there are differences that are important to note but there's very similar uh to the great recession and global financial crisis that occurred in 200 well the great recession was 2007 to 2009 and then there the global financial crisis was 2007 to 2011 really yes uh and and there it's very important because if you look at gold and silver prices relative to that period perod of time. They bottomed out gold in 2000, silver in 2002, and they started rising in 2002, 2004. They rose, you know, we didn't get into a recession. We didn't get into a severe financial crisis until late 2007, early 2008. Uh, but you had gold and silver prices rising for five years prior to that. And gold and silver prices bottomed out and started rising in 2019. uh roughly five years from uh ago. And the other the important point I think is that as I said the recession ended in 2009 but gold prices continued to rise and they met their they made their peak in 2011 and that was because of the sovereign debt crisis in Europe and in the United States. and you had this downgrading of the US Treasury credit rating for the first time ever in August of 2011 and the gold price peaked in September of 2011. And and so the similarity is really interesting because in that period of time you had gold and silver prices rising before for five years before the recession through the recession and for two years after the recession because there were other factors driving investment demand and I think that that's very important. You know, right now we're we're working on our long updating our long-term economic outlook as well as our gold and silver 10-year projections. And and one of the issues is are we on the threshold of a recession or might the recession be later than we had been thinking? Um and and so there's this whole issue that we have to wrestle with in our reports which is the relationship between gold and silver investment demand and prices and recessions and the fact that it's not just recessions and it's not just inflation uh that determine whether or not investors want to buy more gold and silver or less gold and silver. That leads to my next question is what is gold's role in 2025? So in 2011 when you talked when you were talking about uh the sovereign debt crisis in Europe I remember at that time when um credit default spreads were just corporate spreads spreads overall were widening across the board and it was very obvious that uh the bond market was sniffing out some sort of distress uh even before the crisis actually transpired. gold coincided with that and so gold was viewed at the time as a flight to safety away from uh debt assets. We're not seeing corporate spreads widened to the same extent if if if if anything right now. So um >> right is is we're we're looking at a different narrative. Is a paradigm shift for gold? Is it a different role now in our portfolios versus 2011? what we're seeing is a whole range of issues and and in terms of the credit spreads, you know, we're in a situation right now reminiscent of say 1985, 1986 and then again in the '9s uh when Fed Chairman Vulker and then Fed Chairman Greenspan, Greenspan famously said, I believe it was in the 90s that the market was wildly under uh valuing credit risk. and you had a very small spread between say treasuries and corporate bonds and and and municipal bonds and you're seeing a similar situation right now. If you're a large corporation, you can borrow an enormous amount of money at relatively cheap rates. If you're a smaller corporation or a private non-publicly traded corporation, you're paying much higher rates. But in terms of the published rates that large corporations have, the credit spread is very low. The market seems to be underpricing credit risk right now at this point. That said, you also have a lot of people investors who are who are not underpricing the risk and they're saying, "Okay, this is this is a dangerous situation. It's similar to what thing times what we've seen before. We have to be extremely careful." If I look at what's driving gold prices right now, I think the biggest issue is political risk. Uh there's also economic risk, concerns about recession, concerns about rising unemployment, concerns about overall economic growth. Uh the inflation is still there. You know, it's relatively restrained on a headline basis, but there are a lot of inflationary pressures and there are a lot of changes in government policies, tariffs, immigration, and other factors that all carry with them enormous inflationary conditions. You know, we got a notice from one of our clients in the jewelry district here in New York yesterday, and they sent a notice to everybody on their mailing list. They said their prices are going up 15 to 25% October 1st, next, you know, th Wednesday, but because of tariffs and because of other factors, but you're seeing inflationary pressures from the immigration policies, you know, you have you have crops rotting in the fields, meat packing companies that can't process the meat. They're at running at 25 capac% capacity because not only illegal immigrants are afraid to show up, but legal immigrants and anybody who's Hispanic is afraid to go out. You've got people actually making grocery runs for Hispanic people who are afraid to be walking down the street right now because they could be grabbed off. Even legal immigrants feel that way. Even Prince Harry apparently feels that way. So you've got a lot of constraints and you have a lot of inflationary pressures. Most of the big beautiful ter uh bill budget bills cuts are skew skewed to kick in after the bi-election next November in the United States because they realize that if you start cutting Medicaid and social security and Medicare before the November elections next year, you probably see the Republicans losing control of the House or andor the Senate. So they have scheduled these things for the most painful cuts to occur after next year's election. That means that you're not going to see a sharp drop. You're not going to see $2 trillion cuts in government spending now. You're going to see it spread out over what turns out to be two years, 2025, 2026, 2027. That stretches out the period of economic pain and it stretches out the period of time where investors and corporations and consumers are all concerned about the economic outcome. >> Yeah, I would uh love to see the headline if Prince Harry ever gets uh detained uh accidentally. Anyway, uh let me um just circle back to inflation. You said uh many stores are about to raise prices. The big box stores have announced this already. Home Depot, Macy's, I was reading uh um and uh and uh and other other discretionary stores. I wonder how sticky this inflation is this time around. In other words, let's suppose Trump were to reverse some of the tariffs like he's done many times this year. >> Can we see prices revert back? In other words, people actually drop prices because demand is maybe weak. As I said earlier, the big inflationary pressures that we're seeing are in the service sector, not so much in goods. So, it's not so much a factor of tariffs, it's it's other factors that are kicking in. and and and in the service sector obviously uh labor costs are even more do predominant in determining pricing than in the manufactured or consumer uh you know in in in what the the BLS calls commodities things and and those price increases are much more sticky and they're across the board they're in they're in housing services, they're in medical services, they're in financial services, and they're in general services, too. And food distribution, uh, and transportation, and those prices tend to be stickier than consumer, you commodities or things. and and so Trump waffling or tacoing or whatever you want to call it on tariffs has a less prominent effect in ameliorating the inflationary pressures that we're watching in the economy. >> So going back to gold, who's doing the buying? You mentioned there's probably some rotation from uh stock markets into gold. Uh well the stock markets are hitting new all-time highs so maybe not everyone is doing that. Uh who is buying gold right now and I'm asking this because I'd like to understand what would motivate them to stop buying gold? >> We are seeing strong demand for gold in most parts of the world with institutional investors high net worth individuals family offices in North America. Gold investment tends to be for the top 20% or top 10% of the population because, you know, the bottom 50% of the population doesn't have enough discretionary money, you know, if to to buy an ounce of gold. You know, you're going to suck up your your light your your your savings account if you buy an ounce of gold. So, but we're seeing more investors buying gold in more demographic areas and it's really global. We're seeing strong investment demand. I was just in India. Uh and investment demand is up, jewelry demand is down. Uh our Chinese partners tell us that investment demand is is up, but jewelry demand is down. You're seeing strong investment demand in Europe and you know in the top 20% of the population in North America. So it's pretty much general on a global basis. Looking ahead now, do you still see a recession, going back to a recession call, a recession being uh a primary driver of the gold price going up or perhaps an expectation of a recession? You did call on my show uh in the past that a recession is in the cards at least for the CPM group. >> Yeah. The reason I pointed that out earlier in the about the period from 2002 to 2011 2012 is exactly why it's not just a recession. And if you look at the relationship between gold and silver price increases and recessions. 1979 gold and silver prices rose. The recession didn't start until 1980. um the the Audi gold and silver started rising 2000 2002 2004 the recession didn't set in until the end of 2007. So you can have this period of time where the prices rise in anticipation of a recession because they're reacting not only to fear a recession but they're reacting to higher interest rates, higher inflation, the factors that cause economies to tip over into recessions. higher unemployment, slower employment, uh slower job creation, all of those factors tend to emerge before recession and the gold and silver investors tend to and see that anticipate recessionary conditions. If I look at the market right now, I don't see in I see investors worried about infla recession buying gold. I see investors worried about inflation buying gold. I see a more investors worried about the economic and political stability of their region, their nation, their their their local and the world. So you see a lot of safe haven buying that is, you know, and we've seen this especially in the last two days. You know, the gold price rose from 3650 to 3,800 in the last two days. And and you're seeing when you start saying, well, what were what was it? Was there an economic indicator or something that caused investors to say I better buy more gold? And the answer is no. It's accumulation an accumulation of anst economic and political anst listening to all of the stuff going on in the world and in the United States and in individual countries. You know, you have the Frenchy uh government having problems uh with its population not liking it. It's a universal thing. So there's this accumulation of concerns and you know one of the things that we've been saying is the risks that the world and individuals living in the world are facing and the anxiety and uncertainty are greater today than any time since August or December of 1941. Bill, once the US entered World War II after Pearl Harbor in December of 1941, it was clear who was going to win. How they'd win and how much time it would take, that was a different question. But the risks facing the world declined after December 1941 and they are greater today than at any time since then. And that's being reflected investors buying gold and silver globally. There's two theories I'd like to pose uh to you uh Jeff and see if either of them make sense. The first is that the Fed is losing independence. This was actually circulated by um some institutional investors. Goldman Sachs ran a report about how gold is going to go to $5,000 because of this. The Fed losing independence means more money supply uh means more perhaps inflation uh because of lower rates and perhaps more money supply. Uh that's number one. Um and there's perhaps evidence of the Fed losing a dependence if they were not already uh dependent in the first place. Uh the second is uh perhaps gold is just a risk-on asset. Right now there's more risk on appetite than one might think and so investors are just putting their money everywhere as we saw in 20 2020. Although back then we had QE and not so much now. Do either of those theories make any sense to you? Uh the first one makes a tremendous amount of sense and it's important because it's both a shortterm factor that we clearly see driving investment demand on a short-term basis, but it's also on a long-term basis. And it's not just the Fed. Governments around the world are trying to put the screws on their central banks. and central bank independence has been proven to sh to statistically to be a very good thing for long-term economic growth and fighting inflation. So, the Fed losing independence and fears thereof and the blatant way that the Trump administration is touting that they want to do that and the stoogge that they put into the Fed, who clearly, you know, slept through economics 101 in high school. Um all of that is contributing to the current purchasing and it's very worrisome because it's a very much of a long trying thing. You know Fed independence is like virginity. You lose it and it's going to be very hard to convince someone that you've gotten it back. You know so that's a big one. Uh the second thing that you were talking about was yeah there's a lack of QE2 but there's more money today more investment money and a higher percentage of investable funds in cash today than in my memory going back to the 70s. You know so there's a surfiate of money as you said looking where do we put this? Well you look at the stock market it's overvalued. A lot of the overvaluation is is limited to probably 10% or fewer of the comp companies in the stock indices. A lot of companies are actually sucking wind, but the indices are being pulled up by a few companies. Uh so there's a lot of risks in the stock market right now and and in that kind of situation you you see that going on. Now I mentioned earlier you know we're wrestling with the issue if we have been right for the last several years and the gold and silver prices reach a plateau 2027 2028 2029 do they fall or do they plateau and the the difference is it's going to depend on the economic environment. If we actually saw economic and political circumstances improve in 2027 2028, then you could expect prices to decline the way they did in 2012 to 2015 and 1980 to 1990. If they don't fall, uh if the economic and political circumstances don't improve, but the investment community normalizes it and becomes inner to it, then the prices plateau and they don't fall as much. So that's our long-term view. >> Let's take a look at uh Fed policy. Speaking of the Fed, so Chair Powell is still head of the Fed. you know, we can discuss what may happen once he isn't. Today, he made an announcement while he was talking at a speech in Rhode Island and he said, "We do look at overall financial conditions. We ask ourselves whether our policies are affecting financial conditions in a way that it is what we're trying to achieve." But you're right, by many measures, for example, equity prices are fairly highly valued. Um, why would the Fed make an emission like that? And what does that mean for monetary policy? >> Well, it means that uh Paul is a realistic and honest person because if he said that they didn't pay attention to the stock market and he had no idea if the stock market was fairly valued or overvalued, people would say, "Well, he's just lying, right?" But Pal doesn't lie. So he says, "No, look, we obviously pay attention to the stock market the same way we pay attention. Have you ever read the blue book, the beige book? I mean, you to they look at every aspect of the economy, including equity markets, including bond markets. Their Fed pol the Fed policy is focused on short-term interest rates, but they're painfully aware of what long-term rates are doing. And most of the consumer and industrial borrowing is in the long end of the maturity spectrum. So they pay a lot of attention across the economy including the stock market. And for somebody to say, well, I don't pay attention to the stock market is disingenuous. And this guy's been a pretty much of a straight shooter, I have to say. Well, he also noted this is not a time of elevated financial stability risks, noting that perhaps Yeah. What do you make of that comment? Is he right? >> Well, it's not for them. I mean, like I said, you know, you're seeing larger holdings of US dollars and Treasury securities around the world than ever before because the sovereign risks elsewhere are much greater than they are for the United States. So he may be seeing less elevated uh monetary risks but the world is not seeing that which is why he's seeing less because again you know the dollar is like your mama you know you you'll sit on the schoolyard and and you'll talk trash about the dollar and dollar is no good but when you scrape your knees you run to your mama and ask for a band-aid and that's what the dollar is and that's what treasuries are and the Fed's running that. I mean, I I'm sure the Fed I know the Fed because they've said it uh repeatedly. They're not happy with the fact that they are the borrower of or the finance year of last resort for the US Treasury and US government and that the US Treasury and the US government says, "Oh, deficits don't matter. We'll just borrow from the Fed." U they don't like that. I mean, they have, you know, they've been saying, "Don't do that." since Paul Vulker in the early 1980s and the government has clearly ignored them for 40 some odd years. Uh but you know that's the economic reality. >> The Bank of Canada also cut rates uh this past week. Uh one of the reasons according to the Bank of Canada website is that the government's recent decision to remove most retaliatory tariffs on imported goods from the US will mean less upward pressure on the prices of these goods going forward. I bring this up because it seems like central banks are now closely watching uh tariff policy and so let's just tie everything in. What is your expectation for what is ultimately uncertain which is tariff policy and what is your expectation for how the Fed may react to tariff policy and then we can make a you know deduction as to what that means for markets. Well, I think the Fed and other central banks have to be more accommodative because reality is that tariff policies are destructive of economic activity. They reduce the amount of money that consumers and companies and corporations and importers and exporters and everybody else in in the in the real economy have. And that is destructive of economic wealth. And so the Fed and other central banks have to be cognizant of that and they have to be more accommodative to compensate for the you know it's a tariff uh it's a tax uh the the reduction in corporate and consumer wealth due to tariffs. You have to be more accommodative unless you want to let the government throw the world into a global recession. >> Right. Okay. So, let's finish off on gold. What is then your updated, I guess, average price for 2026? But before then, um maybe where gold may end by the end of the year, this year, 2025. >> Yeah, we have gold trading around 4,000 by the end of this year. Um, and it's funny because, you know, I guess in in July we were saying that we thought the price could get to 3,700 by by August, uh, by September and it got there in August. And then in August we were saying we thought that the price could get to 3,800 by October. But here we are in the final week of the final full week of September and it's at 3,800. We have gold trading around 4,000 by the end of this year. And we have gold trading around 4,000 4,100 for most of next year. >> When did you update it to 4,000? Was it recently? >> Um, no, it wasn't. It was actually some time ago. >> Interesting. What What changed? What made you more bullish? the momentum itself, >> the level of perceived risk and anxiety in investors plus yeah the momentum in the in metals prices when the when the price rises we uh you know our projections are based on historic prices. So, if the price is $2,600 in January of 2000, well, we don't use annual a we we use annual average prices for projecting annual average prices. The price is $2,00 you know, $400 in 2024 and we're basing it off of that. And now it's late September 2025 and the average price has been $3,300 so far this year. uh approximately 3,200 3,300. So our projections going forward are based on a higher basis, a much higher basis, 40% higher basis. Uh so that's factored in and that has happened mostly since April, but we had prices getting as high as $4,000 probably going back 2019 prior to COVID. uh we were saying that at some point, not necessarily the fourth quarter of 2025, uh we thought that the gold price could get this high. >> Okay. Certainly your clients have been asking you when to take profits. You you you did you did say in your video and actually to me just now, now is not the time to take profits. So, how are you answering clients questions on when? Well, one of the things that we're seeing which is very interesting is, you know, and our clients range from high netw worth individuals to institutional investors. You have to be an accredited, eligible or exempt investor to to to really get into the nitty-gritty of CPM group services. And one of the things that we found that's very interesting is high net worth individuals, family offices, boutique investments, and even large institutional investors in sovereign wealth funds are saying, you know, you told us that the price would rise very sharply into 2025, 2027. The price is where you thought it would be. >> Yes. now a little bit ahead of schedule, but we look at the world and we look at all the political and economic problems and we're not interested in t selling our precious metals and taking profits. >> How much of that is just greed kicking in? >> It's not greed. It's, you know, it's let me, you know, there's a there's an adage among institutional investors. You don't try to buy in the last 10% of the downward move and you don't buy try to sell in the last 10%. If this were if the economic and political environment were not as hostile as it is, a lot of people would say I'll give up the last 10%. I'm going to take profits. You know, I'll give up the last $380 of any upside. If price is $3,800, I'll take profits. But this is not the situation right now. People are saying, "Okay, we're there, but the economic and political environment is much scarier and more hostile to economic wealth than we thought it would be. So, let's stay long because this thing could continue for several more years, the way Jeff said in 2000." And so, one of the things that's happening is people saying, "Help us structure hedges. We want to stay long physical gold and silver, but let us buy some hedges uh in case the price does drop off, you know, and if you look at a gold price chart, you know, the price a month and a half ago, six weeks ago, the price was $3,300. So, let's say that the price drops $500. That's more than a 10% drop, right? So, you can make a lot of money by hedging at this point and by buying a put and if the price goes back to $3,300, you sell the put back and you you're going to take several hundred of profit out of that and lower your average acquisition price. That that's the way you measure your average acquisition price. >> Fair enough. Let's move on to uh some other metals and close off there. Silver. Let's talk about silver. >> Okay. >> So, what's your update on silver? Our expect well you know our short super short-term view was that if the price got to 4590 I think we'd telling our clients that we might want to sell uh I think the prices got up to about 44 uh 70 something looking at the December contract got up to 4477 today um our expectation is that it probably touches $50 toward the end of this year or in the first quarter of next um and then probably rises somewhat higher over the course of 2026 into 2027. >> That's incredible that this year is going to be a retouch of the previous all-time high for silver and then of course a breaking of all records for gold. I'm just I'm Yeah, >> it's I ran across I was looking for some obscure data and I ran across a presentation that I did in late 2020. And in late 2020, we were projecting that the average price of silver could reach $50 by 2025. Now the average price in 2011 was something like $35 an ounce. The average price in 1980 was 20 2022 an ounce. So you know I don't know what we were looking at at co but we were looking at it from our homes because you know in 2020 uh but you know our expectation has been that the price could get this high. That was the peak that we were projecting. And as I was saying earlier about gold, we're now saying, okay, once it gets there, what does it do? Does it come off? Does it plateau? Or does it go higher? >> And we don't have the Hunt brothers cornering the market this time around. >> The Hunts never tried to corner the market. That's a mis that's a that's a misrepresentation of what they were doing and what was going on. If the if it were the hunts trying to corner the market, gold wouldn't have gone from 190 to 850. Copper wouldn't have gone from 60 cents to a$180. Oil wouldn't have gone from $10 to $40. You know, there was a lot going on. The hunt saw it coming and they wanted to ride that wave. And once they built their position, they told their brokers, "Hey, you can feel free to tell everybody you know what we've done." Yeah. The hunts were not trying to corner the market. They saw a supply demand tight market and they expected the price to rise and they they made a couple mechanical mistakes uh which cost them their fortune but they were not trying to corner the market. >> Uh you're yeah uh >> I know because I think >> uh fair enough. Well, the the point I was making, Jeff, is that there's no perhaps there isn't an artificial supply squeeze happening right now that's going to push silver up. It's just naturally happen happening along with the other commodities right now. Is that what we're trying to say? >> Yeah. I mean, you know, the silver silver market's well supplied and uh you know, it's it's weird because you hear people talk about how we're running out of silver, but you know, the COMX inventories are five times what they were three years ago. They're double what they were historically back in the 80s and 90s. Uh London stocks are down from their COVID peak, but they're triple what they were estimated to be back in the '9s. Uh, Shanghai stocks are up. You've got 2.5 billion ounces in silver bullion coins. You got a billion ounces in ETFs. There's a lot of silver around. So, um, it's it all comes down to investment demand. >> How would you describe 2025? Let's suppose let's go forward in time a couple years. Let's say it's 2028 now and you and I are talking again in three years. And I ask you, hey Jeff, let's do a little quick history lesson for the audience here. How would you describe 2025 in terms of themes? So 2020 prices moves dramatically because of COVID and subsequent Fed policies. Well, not just Fed, but central bank policies around the world. We can go back in time to 2008. Talk about the great financial crisis. What happened this year that pushed prices for everything up to new all-time highs? How would you describe this year? >> I guess I'd probably say something like, well, you know, before the war, David. >> Yeah. Yeah. >> Okay. Wow. So, you're expecting some sort of major conflict. Is that >> they're here? You know, we're seeing the major conflicts and we're seeing major changes. You know, there are scenarios that we have talked about internally for decades that we've never mentioned to our public that are now on the cover of the Economist and Time magazine. You've got, you know, I mean, what is that Jeff? If I were Vladimir Putin and I wanted to destroy the United States, I would have no better weapon than Donald Trump. Yeah. And Donald Trump is sitting there saying, "Okay, I'm acting as if I'm upset with Russia because of its Ukrainian invasion. So, I'm going to put tariffs on India, but I won't put any tariffs, real strict tariffs on Russia." Right? and he's toying up to China privately. He's toading up to Russia. And he has shown a proclivity, an attraction, a fatal attraction if you will, to authoritarian figures uh like his daddy uh before. Uh and so you have to really worry about him and all the people around him. And you know, Putin right now, as we speak, last night, you know, he's pushing buttons in Eastern Europe. He's flying drones over Poland and Romania and Denmark and Norway. He's flying fighter jets over Estonia. He wants non US NATO to say, "Okay, this is it. We're going to shoot some stuff down if you cross the border." Knowing that the United States under Donald Trump will say, "No, no, no, no. We don't want to do that." He's trying to create a a a break between the United States and the rest of NATO and Trump's going along with him. >> So, let's suppose, >> okay, >> put it this way. Donald Trump was right when he said he could end the Ukraine war in 24 hours. All he has to do is say to the Ukrainians, you can use the weapons that we put in your country. Donald Trump was right that he could solve the Gaza war, too. All he has to do is stop sending offensive weapons to Israel. But he hasn't done either of those things in 9 months. >> So bottom line is you see these conflicts prolonging if not exacerbating thus helping the gold market. >> Yes. >> By the way, uh on the just very interesting talk here on the NATO front, let's suppose Putin gets his way. there's a rift between uh Europe uh and the US or just US and other NATO allies. What happens then? I mean, does Europe still uh band together on their own and form their own kind of alliance and fight Russia >> or does Russia have confidence to expand westward? Look, you had you had programs in play. You have programs in place in Europe and Canada, the the rest of of NATO to continue as NATO without the United States. And they have been making plans about this for years and they are taking steps to in insulate themselves from the negative consequences. should the United States pull away from NATO and and those con you know the the plans include uh who's going to replace the US military at Monz uh NATO headquarters outside of Brussels uh the United States military was also making contingency plans and actually said in public you know there are constitutional ways where the military can not do things that the president orders them to do. They said that in the first Trump administration and so in the first two weeks of the current Trump administration all of the highlevel military were replaced because they had indicated that they would not necessarily go along with unconstitutional actions ordered to them by the president. All right, we have to close off now and um well, we'll finish this discussion another time. Let's talk about platinum before we end the conversation. We mustn't forget that the PGMs did very well as well this year. Uh alongside gold, platinum itself is up 63 64% depending on the start and end date year to date. So, what happened with platinum this year? I think what happened with platinum was that you as you said earlier they you know people are sort of putting money wherever they can and gold and silver were rising. Platinum was you know platinum has traded between $800 and $1,100 for most of the period of time from 2015 into June of this year. In late May, you saw a platinum marketing uh group come out with a report that said there's a massive deficit, which there's not. Uh and that you had a big surge in platinum imports into China, which you did not on a on a annual basis. On a month-to-month basis, you did because in imports fell very low in January and then they re rebounded in March and April. So they were up from one month but it they were actually down from March and April 2024. Uh and that the jewelry industry jewelry demand demand consumer demand for platinum jewelry was extremely high in China. Although the major importer of platinum to the chi Chinese jewelry industry in their report said, "We've seen a lot of demand for platinum from the jewelry industry in China, but we think it's mostly going into inventories in the jewelry industry and not into jewelry that's being sold on to consumers." So, you had a really interesting hypy marketing story that came out at the end of May. A lot of investors jumped into platinum and they took it from $1,000 to $1,500. >> It has nothing to do with changes in the car industry and perhaps a shift back into um petrol uh from EV mandates. A lot of car industries or a lot of car companies rather in the industry are saying no no we're not going to go all EV. Yeah. >> Yeah. There are some fundamentals that are real that are positive for platinum. One is that there has been a slowdown in non-Chinese uh conversion to electric vehicles which has increased platinum demand somewhat uh in the auto industry. But a bigger thing is been reductions uh in South African production. >> Okay. All right. Great. Let's leave it here. Jeeoff, a very thorough discussion. So I thank you for your time. Where can we learn more about you and CPMgroup? >> cpmgroup.com. www.c cpmgroup.com's our website. You there are a lot of free reads and free videos. You can go to the YouTubetubes. There are hundreds of CPM group videos. We do them. We try to do them twice a week, Tuesdays and Fridays. Uh we did this week's on Monday because today is Rashashana. Um and um those are the two uh public waves and then you can always send an email to info@cpmgroup.com saying let's talk. >> All right, we'll put the links down below. So make sure to follow Jeff and the CPM group there. Thank you again, Jeff. Have a great week and we'll speak again soon. Take care. >> Well, thank you. Take care. >> Thank you for watching. Don't forget to like and subscribe.