Thursday, 20 June 2013

Gold under $1300 - Jeff Christain was too bullish evidently!

I was fascinated by an interview of precious metals expert Jeffrey Christian on Kerry Lutz' show in late April 2013, after the gold smash that took it from $1590 to $1321 in 2 days (across a weekend) on Friday 12th April and Monday 15th April 2013.

JC is not normally credited as bullish by the goldbug crowd and has drawn a lot of criticism from them for his toned down analysis on gold's bull market. However, in this interview, he admitted that he had expected gold to hold in this correction in the $1400-1430 level, which to my mind was a critical level, being the price region that saw a lot of back and forth trading in late 2010 and early 2011.

Jeff said that he now expected the $1321 bottom in gold to hold or thereabouts, not discounting the possibility of a final move lower though. He expected gold to trade for at least a couple of years between this level and $1500/1600 before moving higher later this decade and getting to new highs by around 2020.

Well, Jeff, you were too bullish! Maybe you need to join GATA! Gold is now $1282 as I write, after taking a June swoon (on 20 June 2013) and breaking convinsingly below the previous $1321 low and also below the early 2011 low of $1309, which may be significant. I wonder now if a target of $1155 if in play.

I never thought that Jeff Christian would be seen as too bullish by a good margin too. I think that, rather than criticising someone like JC for his balanced approach to gold, the gold bugs should understand that an advisor to large corporations such as JC, with his highly informed outfit CPM Group is likely to be somewhat conservative on the upside and on the downside and is going to be talking mostly about  prices averaged over a quarter or even any given year. Jeff was on record a couple of years agi saying that a spike to around $2000 was possible and then a bear market might ensue, at least a very major correction.

In hindsight, he was close. The gold price topped at $1920 in late 2011 and now as of June 2013, there has been aa bear market of 18 months of painful downside to a $1285 low today.

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