Gold could hit new all-time highs after 2016, CPM Group says - Wealth Managers

Until then, the metal's at its "cyclical bottom," predicts Jeffrey Christian

CPM Group, a consultancy that publishes annual yearbooks on gold, silver, and other precious metals, has never been irrationally exuberant in its recent price forecasts. When gold bulls were saying $2,000 was inevitable, the firm generally reacted with skepticism. However, after gold corrected severely earlier this year, it started to issue cautiously bullish statements.

Now managing partner Jeffrey Christian is repeating those positive sentiments in a new interview published this month atMining Markets, along with a reiteration of his presentation at the Denver Gold Forum in October.

"There are any number of massive financial, economic and political imbalances that have caused all of the economic problems over the last 12 years -- not just 2008-09, but 2000-01 and everything in between," Christian said. "None of those issues have been dealt with effectively. ...

"Our expectation is that by 2016-17, investor concerns over those longer-term imbalances will resurface," he said.

As demand starts to intensify again, supply also will have shrunk as a result of the cuts gold miners are having to make now in response to lower gold prices, Christian said.

"We think that we're at the cyclical bottom for gold," he said.

The gold price should rise sharply from 2016 to 2023, with Christian forecasting new nominal highs above $1,921 in eight to 10 years' time. However, prices could be stuck between $1,240 and $1,500 until then.

As for possible tapering of the Federal Reserve's quantitative-easing stimulus program, Christian says it's already priced into the gold market. "We think that the market is spending far too much attention on it -- it's become the flavor of the month," he said. Christian expects the Fed will begin to pull back on QE sometime in the first half of 2014, but that any reduction in purchases will be very modest until the U.S. economy exhibits more strength.

More information can be found online at http://www.goldbullionadvisors.com