Investors who backed away from precious metals in 2022 may be ready to re-enter the sector this year.
Speaking to the Investing News Network, Jeffrey Christian, managing partner at CPM Group, said in the first few of weeks of the new year he’s already seen better interest from institutional investors and high-net-worth individuals.
“If I’m right, what we’ll see is a lot more rational investors saying, ‘Gold and silver make sense in a diversified portfolio. I understand their loose relationship with interest rates, I understand their loose relationship with stocks and inflation and other factors — but I also understand that if I have gold and silver in my portfolio, I have a less volatile net wealth,'” he said.
Overall, Christian thinks 2023 will be a period of transition after various threads unraveled in 2022. He sees a higher interest rate environment — although he doesn’t anticipate sharply higher levels — and also expects inflation to keep softening.
When it comes to where the gold price will go, Christian has a moderate forecast for the year ahead.
“I think we’re probably talking about US$1,700, US$1,720 (per ounce) as a low, possibly in the middle part of the year, and a price closer to US$2,000 by the end of the year,” he said. In terms of more specific timing, he said the yellow metal should be strong in the first quarter, somewhat weaker in the second and third quarters and then stronger again by the fourth quarter.
He encouraged investors to do their homework and consider having 5 to 10 percent of their portfolio in precious metals.
“I would own physical gold, physical silver. I would have a selection of small and mid-sized mining companies, and maybe some larger, well-run, highly profitable companies,” he said. “But focusing more on the mid-tiers because they’re takeover targets.”
Christian concluded, “I would say that having a substantial portion of your wealth in gold if you can afford it — and silver — always makes sense. And right now in 2023, it probably makes more sense than it has at other times in history.”
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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