Christian Versus Embry: Gold, Lies and Video Interviews


"Strongly opposing views on the likely speed of any gold price increase, and some of the factors affecting this likelihood, make for some very polarized opinions."


In a recent interview on Canada's Business News Network, CPM Group's founder and head, Jeff Christian, set out his views on the gold price going forward, given the recent strong recovery and, in response to a question, also made a pretty vitriolic attack on a recent BNN interview with John Embry and the latter's views on the slow pace of Bundesbank gold repatriation to date.

Re the gold price, Christian had predicted late last year that gold might reach $1,320 in February or March—so far so good—and in a later interview only a few weeks ago thought this might more likely be achieved by late March rather than February but, as gold followers will be well aware, this view has since been overtaken by events with gold hitting this level, last week before falling back a couple of dollars to around $1,318 at the week's close.

See: Christian sees $1,320 gold before end of Q1, $1,900 long term

However, Christian again reiterated his view that the $1,320 level, or thereabouts, will remain a temporary top with prices being brought down by profit taking, but was quick to add that he now expected a rise again once the gold price has gone back to whatever new (unspecified) level it might settle back at. Obviously the next few days will tend to see whether his views are correct or not, but given how much earlier gold achieved the $1,320 level than he had recently been predicting, then maybe there could yet be another surge before any fall back.

But never one to duck conflict with what he sees obviously as the misguided, or worse, views of the mega bull section of the gold investment scene, Christian allowed himself to be drawn into a major confrontation with the views of the Sprott organization's John Embry regarding the very slow pace of the repatriation of gold from Fed vaults in the U.S. to Bundesbank vaults in Frankfurt.

In an earlier BNN interview, some of which was played back to Christian, Embry expounded on his views of the handling of the repatriation of gold from Fed vaults to Germany and expressed his opinion that perhaps the reasoning behind the slow pace of return of the gold (only five tonnes last year), and the fact that original German gold bars were unable to be returned, was because the U.S. Fed doesn't have it either because it is gone—leased, swapped, hypothecated etc. and it's taking time to secure gold for return.

Christian, not mincing his words, described this as "total nonsense" and that Embry either "didn't know what he was talking about," or it was just a "total fabrication!" Christian then commented that that the original Bundesbank release on the return of the German gold said the gold would only be returned over a seven year period, and this schedule has not been changed. Indeed the Bundesbank has implied that the German gold is actually more use to it in U.S. and U.K. vaults. (Going further this suggests that the Bundesbank repatriation request will have been entirely due to domestic political pressure to bring back at least some of its gold against its own better judgment).

Christian went on to describe Embry's statement, within an interview where he was predicting a strong rise in the gold price ahead, as designed to scare investors into buying gold.

Indeed when it was pointed out by the interviewer that a number of other gold proponents were also of the same view as Embry, Christian raised the stakes even higher with the comment that many of these pro-gold comments were from those whose businesses relied on investors continuing to purchase gold and that they had been panicked by the fall in the gold price, and the consequent decline in gold purchasing and would do anything to scare investors back into buying gold, including "downright lies."

Now Jeff Christian and John Embry are obviously poles apart in their views on gold, and both have a strong following. Christian would perhaps describe himself as a rationalist and Embry perhaps more of an evangelist as far as gold and precious metals are concerned. We don't doubt that both sincerely believe in the points of view they express, but are not sure such a forthright dismissal of an opposing viewpoint serves any useful purpose except perhaps to stir up further controversy in the gold investment camp, which may be good for future conference and media debate.

But, be this as it may, one point to draw from the Christian interview, is that he, like Embry, does believe that gold will move higher over the course of the current year—obviously not to the same extent, but it does put Christian at least in the mildly bullish camp which is more than can be said for many of the bank analysts out there, with Goldman Sachs, for example, re-iterating its viewpoint at the end of last week that gold is yet due for a fall back to the $1,000 level during the course of 2014.

We will have to wait and see how things work out in the event, but as far as being mildly bullish, this writer is primarily of this viewpoint and does anticipate the price will be higher at the end of the year, but perhaps not hugely so!

Lawrence Williams

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