Good afternoon, it's Jeffrey Christian of CPM Group. It's about 10 minutes after three o'clock in the afternoon in New York, Monday the 13th of October. recording this Monday afternoon because of our schedules on Tuesday. I want to talk about the precious metals prices that have spiked higher.

Gold prices have risen very sharply, up $123.30, to $4,123, basically breaking above $4,000, which they were testing last week. Silver prices are up $3.30 to $50.55, a record price breaking above $50 forcefully today.

Spikes in gold and silver prices are due to fundamentals such as strong demand and tight supplies in London and Mumbai. In addition, investment demand and speculative buying are pushing prices higher.

Precious metals, as safe haven alternative investments, are rising together with industrial commodities, stocks, bonds, and the dollar, which usually rise during periods of economic strength. There is a short-term view that economic strength may last another quarter or two, with longer-term concerns of a severe economic future over the next several years.

Investors are buying gold and silver both as risk assets and hedges, and also investing in other markets showing recent strength.

Platinum and palladium prices have also risen sharply since June, with a lot of buying being short-term speculative futures purchases as opposed to physical metal.

There is no backwardation in COMEX silver contracts; what appears as backwardation is actually arbitrage between London, Mumbai, and New York prices, reflecting tight supplies but not a squeeze.

Supplies are tight, especially in India and London, caused largely by speculative binge buying rather than necessity to cover futures and forwards.

The spike in metals prices could unwind relatively quickly because it is driven by speculative buying rather than a structural squeeze.

Price level examples: gold touching $4,105 today is incredible, but the annual average price this year may not reach that level despite these spikes. Silver December price reached over $50 today, much higher than the year-to-date average of $37.76.

Considering the remaining weeks of the year, it is possible, but less likely, for silver to average $48 over next three months to achieve a $40 annual average; averaging $50 for the year would require $94 average for the next 11 weeks, which is highly unlikely.