The US Federal Reserve’s struggle to curb inflation while supporting the economy is strengthening the case for gold and silver as investors seek protection from mounting risks, CPM Group managing partner Jeffrey Christian says.
“In the longer term, the fact that the Fed is facing this very difficult situation of trying to fight inflation while also helping the economic health and employment situation, I think that that’s positive,” he told host Adrian Pocobelli on the Northern Miner podcast.
“It reinforces the enormous risks that the economy is facing right now, and it’s those uncertainties and the anxiety that those risks create that cause investors to say ‘I should have more of my money in gold and silver.’”
Christian said the appeal of precious metals extends beyond monetary policy as investors consider a range of potential political, economic, financial and social disruptions.
“We’re thinking about a whole host of things that could go wrong politically and economically and financially and socially. If you look at the financial markets and you look at the stock market, the credit market, dollars in circulation, a lot of capital is being sucked up by relatively new tentative companies using relatively new tentative technologies,” he said.
Gold’s future
Christian expects gold prices to climb further over the next several months.
“Testing 5,000 we think is easily within the scope of the next four months and possibly breaking above 5,000 is also something that we think is real and quite possible,” he said.
Investor behaviour remains divided, however.
“There are a lot of more traditional investors buying gold and silver on a long-term basis because they’re worried about the long-term economic and political environment, but you have other people who are shorter term, more opportunistic, selling into the market,” he said.
