Jeffrey Christian: Black Swan Events Aren't Impossible to Prepare For | Summary and Q&A

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March 5, 2020
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Investing News
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Jeffrey Christian: Black Swan Events Aren't Impossible to Prepare For

TL;DR

Gold prices have been volatile due to the economic consequences of the coronavirus outbreak, but are expected to stabilize as the virus dissipates. Investors should diversify their portfolios and consider owning gold and silver to protect themselves from unforeseen circumstances.

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Key Insights

  • 🏅 The coronavirus outbreak is the primary driver of recent gold price volatility, as financial markets react to its economic consequences.
  • ⏳ Gold serves as a diversifier against the stock market, especially during times of low and decreasing interest rates.
  • 🏅 Political events are becoming increasingly important for gold prices, with future years projected to see more influence from political trends in the market.
  • 😜 Large mining companies may engage in more mergers and acquisitions despite ill advice, due to the changing financial market landscape.
  • 😀 The mining industry is facing challenges with declining liquidity and capital flows, as financial markets shift towards index investing and passive investments.
  • 🧑‍💼 Junior mining companies should focus on seeking financing from smaller specialist funds, family offices, and prominent mining type investors.
  • 👨‍💼 The mining industry needs to adjust its business plans and financial strategies to accommodate the changing financial market environment.

Transcript

I'm Charlotte McLeod with the investigators network and here today with me is Jeffrey Christian managing partner at CPM group thanks so much for being here today pleasure great so we're here at PDAC were a couple of days into the show I want to start by talking about those recent price activity what do you think has driven the volatility we've seen... Read More

Questions & Answers

Q: What has been driving the volatility in gold prices recently?

The coronavirus outbreak and its effects on the global supply chain have caused financial market reactions, leading to fluctuations in gold prices. Additionally, the increased focus on futures and options trading has contributed to the volatility.

Q: Can investors be prepared for unforeseen events like the coronavirus outbreak?

While it is challenging to anticipate such events, investors can protect themselves by diversifying their portfolios and including assets like gold and silver. History shows that anomalous events occur regularly, and owning gold and silver serves as a means of diversification.

Q: Are there any similarities between the current market situation and the 2008 financial crisis?

According to Jeffrey Christian, the similarities are more aligned with the 2001 recession rather than the 2008 financial crisis. He highlights the decline in the stock market and the resemblance to the events of 2001. However, he cautions that similarities to the late 1920s and early 1930s are more worrisome in the long term.

Q: Where is gold headed this year amid all the market uncertainties?

As the impact of the coronavirus diminishes, gold prices are expected to stabilize and trade sideways around $1550 to $1640. Factors such as U.S. politics, Brexit, and potential economic recessions will influence gold prices. More significant price increases are expected in the next few years, as major recessions are not anticipated in the short term.

Summary & Key Takeaways

  • Recent price activity in gold has been driven by the coronavirus outbreak, causing volatility in the financial markets.

  • Investors should be prepared for unforeseen circumstances, such as economic recessions, by diversifying their portfolios and including gold and silver.

  • Gold prices are expected to stabilize as the coronavirus impact subsides, trading around $1550 to $1640 throughout the year, with potential price increases in the fourth quarter due to U.S. politics and Brexit.

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