In this presentation, Jeffrey Christian of CPM Group explains why gold, silver, platinum, palladium, and broader financial markets sold off as long-term U.S. Treasury yields rose. He looks at how Treasury-based valuation models can put immediate pressure on asset prices and why the reasons behind rising interest rates matter for the longer-term precious metals outlook.
With gold around $4,187, Jeff discusses the possibility of further declines toward $4,000 or even $3,800. CPM’s latest ultra-short-term trading recommendation was to stand aside and wait for a clearer opportunity to reenter on the long side, potentially at lower prices. That trading caution accompanies a continued expectation that political and economic conditions will encourage additional gold and silver buying over the next two to four months.
Jeff explains why rising interest rates can have different implications depending on what is driving them. He points to financial pressures on governments, businesses, and consumers, along with high petroleum prices and persistent political uncertainty. He also discusses why CPM expects uncertainty surrounding the U.S. congressional elections to continue beyond Election Day.
The silver market update examines the return toward the upper end of its June–July trading range and CPM’s expectation of higher prices over the coming months.
Jeff then discusses efforts to regulate over-the-counter derivatives and the competing incentives that can shape legislation. He considers how industry specialists can improve rules while also influencing requirements in ways that favor established firms over smaller competitors.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.