Serpo
30th August 2011, 03:55 PM
With gold consolidating recent gains, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management. When asked if he purchased gold in the recent decline Embry stated, “Well, as a matter of fact I picked up two kilo bars in the low $1,700s. I think the recent low may very well mark the bottom. This was a classic smash down, replete with a Comex margin hike and I think the cartel might have been taken aback by the ferocity of the rally because they had a lot of people shorting along with them on the way down.”
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John Embry continues:
“Now gold is going to have to digest the gains. The backdrop for higher gold and silver prices is magnificent. If you look at it from an Austrian (economists) point of view, there has to be a terrible economic outcome to this because of the incredible debt explosion. Plus you have the additional leverage that was created by astounding amounts of derivatives. There has never been anything like this.
Jim (Sinclair) was the guy who saw it first. I can’t tell you how much respect I have for Jim Sinclair, I just think the guy is unbelievable and he’s dead right. What got me about Sinclair was the fact that he stepped off the gold trade at the absolute peak in 1980 and vanished for twenty years.”
When asked about the shorts in gold Embry responded, “They shouldn’t have been short to begin with. The physical demand for gold is accelerating. People that were shorting into this precipitous drop were unaware of the condition of the physical market. The premiums all over Asia have blown out to the upside and I think the Vietnamese premium was the largest I’ve ever seen. Big premium in Shanghai, Indian premiums blew out to positive levels, that’s all indicative of physical buying.”
When asked about silver specifically Embry remarked, “I would be less concerned about the timing in silver now than the fact that you must be there. Whether it could correct further from here, I don’t know, but it doesn’t make any difference because the next big move is going to be huge and it’s going to be up. The key is how long can the huge bullion bank short hold its position and continue to try to influence the market....
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“When asked about the action in the mining shares Embry had this to say, “I think it’s extraordinarily important that the mining stocks have to act well today in the face of this orchestrated take down once again in gold. In my opinion the mining shares are acting well and I think they are just building up a head of steam under the 600 level (on the HUI). The next time that it blows through 600 it’s off to the races.
The fundamentals for the gold stocks have improved considerably. The fact is that the higher price for gold, coupled with lower input costs is going to lead to better margins. What’s really going to unleash these stocks is the realization that gold and silver aren’t in a bubble and in fact they are just getting ready to move on to higher levels.
When this is grasped by the public and they realize how far behind the bullion prices the shares are, there is going to be a massive catch-up all in what will seem like one moment. It’s going to happen and when it happens there is going to be a lot of money made.”
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/29_Embry_-_Incredible_Physical_Gold_Demand%2C_Premiums_Explo ding.html
</frame>
John Embry continues:
“Now gold is going to have to digest the gains. The backdrop for higher gold and silver prices is magnificent. If you look at it from an Austrian (economists) point of view, there has to be a terrible economic outcome to this because of the incredible debt explosion. Plus you have the additional leverage that was created by astounding amounts of derivatives. There has never been anything like this.
Jim (Sinclair) was the guy who saw it first. I can’t tell you how much respect I have for Jim Sinclair, I just think the guy is unbelievable and he’s dead right. What got me about Sinclair was the fact that he stepped off the gold trade at the absolute peak in 1980 and vanished for twenty years.”
When asked about the shorts in gold Embry responded, “They shouldn’t have been short to begin with. The physical demand for gold is accelerating. People that were shorting into this precipitous drop were unaware of the condition of the physical market. The premiums all over Asia have blown out to the upside and I think the Vietnamese premium was the largest I’ve ever seen. Big premium in Shanghai, Indian premiums blew out to positive levels, that’s all indicative of physical buying.”
When asked about silver specifically Embry remarked, “I would be less concerned about the timing in silver now than the fact that you must be there. Whether it could correct further from here, I don’t know, but it doesn’t make any difference because the next big move is going to be huge and it’s going to be up. The key is how long can the huge bullion bank short hold its position and continue to try to influence the market....
..
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/29_Embry_-_Incredible_Physical_Gold_Demand,_Premiums_Explodi ng_files/shapeimage_22.jpg
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/29_Embry_-_Incredible_Physical_Gold_Demand,_Premiums_Explodi ng_files/shapeimage_23.jpg
“When asked about the action in the mining shares Embry had this to say, “I think it’s extraordinarily important that the mining stocks have to act well today in the face of this orchestrated take down once again in gold. In my opinion the mining shares are acting well and I think they are just building up a head of steam under the 600 level (on the HUI). The next time that it blows through 600 it’s off to the races.
The fundamentals for the gold stocks have improved considerably. The fact is that the higher price for gold, coupled with lower input costs is going to lead to better margins. What’s really going to unleash these stocks is the realization that gold and silver aren’t in a bubble and in fact they are just getting ready to move on to higher levels.
When this is grasped by the public and they realize how far behind the bullion prices the shares are, there is going to be a massive catch-up all in what will seem like one moment. It’s going to happen and when it happens there is going to be a lot of money made.”
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/29_Embry_-_Incredible_Physical_Gold_Demand%2C_Premiums_Explo ding.html