Jeffrey Christian, Managing Partner of New York based commodities and agricultural research organisation CPM Group, is something of a bête noire to the ardent gold bull community given his stated views run contrary to theirs on a number of issues – most notably on gold market manipulation. Indeed he probably takes some perverse pleasure in this and is certainly not shy of entering the lion’s den and putting his viewpoints forward at some events where he is certain to be doing so in front of a largely hostile audience.
Nonetheless he runs a highly respected research organisation and its prognostications on the likely forward path of the gold price have always been taken extremely seriously by the mainstream corporate and investment sector – and in general the research cannot be considered to be either permanently bearish or bullish, but is put forward as Christian and his team of researchers see the position at the time.
So he will be particularly pleased that he called the January high point in gold almost to the dollar at $1,280, and although he is looking to ups and downs ahead he sees gold perhaps hitting $1,320 in February or March – probably more likely to be in late March than early February he told Kitco.com in an interview on Wednesday. He does comment that if gold gets back above $1,280 in the meantime, short covering could drive the price up to the $1,300s earlier. And over the long term Christian is actually of the bullish persuasion, but probably not so much as to have the gold bulls that excited about his viewpoint; he sees gold as perhaps getting back to the record $1900s or higher within the next eight to ten years, whereas the out and out gold bulls may well be calling for a figure two to three times bigger than that or more over the same time period.
Christian had noted just over a month ago that he anticipated gold would trade between $1,240 and $1,500 over the next two years (actually a pretty bullish prediction compared with those most mainstream bank analysts have been putting out since the beginning of the current year) with the possibility of spikes above and below these levels occurring in a fairly volatile market which seems to be driven up and down almost daily by the latest economic news items. However, Fed tapering, thinks Christian, will probably not be a significant factor as he feels it is largely priced in already.
So overall this is a pretty sober assessment of where gold is headed short and long term. Dollar strength will perhaps remain important and should the Fed continue with its tapering programme then this will suggest continuing growth in the U.S. economy which could be seen as positive for the dollar, but negative for gold. But emerging market economies seem to be taking a big knock over worries about the taper and these will likely accelerate if it continues, so in their currency terms gold could still rise strongly even if it is not doing so in the U.S. dollar. But then serious turmoil in the emerging markets could have a positive impact on the dollar gold price too.