CPM’s Christian ‘out of sync’

I can’t restrain myself from commenting on Mr. Christian’s “pontificating” on gold price analyses (T.N.M. July 29-Aug. 4). It’s not that I disagree with his thesis, but rather that pontification is a trademark of his company, New York City-based CPM Group.

I recall that at the Prospectors and Developers Association of Canada convention in 2001, he warned his listeners to beware of the prophets and novices who were spreading false “truisms” about future prices for platinum and palladium.

I had a feeling his remarks may have been directed at me since my company had just published PGM: World Resources, Economics and the Future and was selling it at the convention. I had forecast a drastic swoon in palladium prices and continuing good fundamentals for platinum, predicting that the latter would strongly reassert price superiority over palladium. To my knowledge, no other precious metals analysts were saying anything different from that of CPM.

Our gutsy prognosis was made with palladium at its apex in early 2001, and it was made using good old supply and demand analysis (terms not found in Mr. Christian’s article). Unfazed by an almost 30% drop in palladium demand from its peak in 1999 through to the end of 2001, and a palladium price at less than half what it was at the beginning of that year, CPM projected, in November 2001, forward palladium prices of US$1,600 per oz.

In CPM’s February 2003 report, with Mr. Christian’s PGM projections in tatters, his haughty, wounded prose read as follows: “All sorts of bizarre rumours and stories have circulated in the market to try to explain the steep rise in platinum prices (to US$658/oz.) over the past five weeks. Most are clearly false. Some appear to be intentionally designed to harm market participants’ reputations…Indeed, it may be that whatever group is doing this is seeking to collapse the forward platinum market, in much the same way that the forward palladium markets were devastated over the past four years.”

This is small sample of an entire report. And on the subject of gold in the same document: “From a fundamental long-term perspective, gold is over-valued at US$370.”

I wondered if he thought I was capable of collapsing forward PGM markets all by myself. In my opinion, the false premises of heavy-hitters like CPM and alike were responsible for the untenable prices of palladium in 2000-2001. Mr. Christian, you were the one out of sync with the realities of the market.

Our second major PGM report is just out, and we are trembling in our boots since we have projected great things for palladium, which is currently resting on the floor.

Gary Pearse

Equapolar Resource Publications

Ottawa, Ont.