gunDriller
18th May 2014, 03:24 PM
Normally I respect him, that's why I'm posting it.
I think he's missing the part about physical being available. The current Cartel completely fvcks up the normal market signals of supply and demand.
A game that can last as long as they can find physical to meet the market needs.
He thinks there is enough physical to allow lower prices in the next few years ? I disagree.
http://asiaconf.com/amm/may2014
One final question on another pet topic of yours: commodities, and particularly gold. You’ve suggested that there’s more downside for gold in the short-term. Is the thesis there that the correction since 2011 hasn’t fully played out?
JR: That’s partly it. It was very abnormal what happened in gold – it had 12 years without a single down year. Gold hasn’t even had at a single 50% correction in at least 14 years. That’s very strange! Most assets correct 50% at some point, even in big bull markets. So the price action in gold is still abnormal, in my view.
Also, the fundamentals remain challenging. Indian politicians are blaming their problems on gold. At one point they were trying to force Indians to sell their gold. They may try that again. India has been the largest consumer of gold in the world for years and if the politicians get locals to sell their gold, who knows how low gold could go.
Gold bugs always focus on Chinese demand and they seem to ignore Indian demand…
JR: I know they do. People used to tell me that gold was “holier than thou” and that it would never go down in price. And I’d point out that India is the largest consumer of gold [ed: until recently when China took over that mantle] and it’s doing its best to get the gold price down. Well, these people would look at me like I’d flown in from Mars!
We should expect a 50% correction towards US$1000 an ounce then?
JR: I don’t know if there’s going to be a 50% correction. I’m just pointing out that the fact that there hasn’t been such a correction during this gold bull market is abnormal.
I am not buying gold at the moment. In my view, there are still too many gold “mystics”- people who haven’t given up despite the declining price. If we have a big wash-out where these mystics give up, then gold will be a great opportunity. Until that happens, I don’t see that gold has quite bottomed.
But I hasten to say that if America and Iran go to war, or something else similar, I’ll be buying gold even if the price is going up. It partly depends on how the world evolves.
Either way, I do expect another chance to buy more gold over the next two to three years and I hope I’m smart enough to act.
I think he's missing the part about physical being available. The current Cartel completely fvcks up the normal market signals of supply and demand.
A game that can last as long as they can find physical to meet the market needs.
He thinks there is enough physical to allow lower prices in the next few years ? I disagree.
http://asiaconf.com/amm/may2014
One final question on another pet topic of yours: commodities, and particularly gold. You’ve suggested that there’s more downside for gold in the short-term. Is the thesis there that the correction since 2011 hasn’t fully played out?
JR: That’s partly it. It was very abnormal what happened in gold – it had 12 years without a single down year. Gold hasn’t even had at a single 50% correction in at least 14 years. That’s very strange! Most assets correct 50% at some point, even in big bull markets. So the price action in gold is still abnormal, in my view.
Also, the fundamentals remain challenging. Indian politicians are blaming their problems on gold. At one point they were trying to force Indians to sell their gold. They may try that again. India has been the largest consumer of gold in the world for years and if the politicians get locals to sell their gold, who knows how low gold could go.
Gold bugs always focus on Chinese demand and they seem to ignore Indian demand…
JR: I know they do. People used to tell me that gold was “holier than thou” and that it would never go down in price. And I’d point out that India is the largest consumer of gold [ed: until recently when China took over that mantle] and it’s doing its best to get the gold price down. Well, these people would look at me like I’d flown in from Mars!
We should expect a 50% correction towards US$1000 an ounce then?
JR: I don’t know if there’s going to be a 50% correction. I’m just pointing out that the fact that there hasn’t been such a correction during this gold bull market is abnormal.
I am not buying gold at the moment. In my view, there are still too many gold “mystics”- people who haven’t given up despite the declining price. If we have a big wash-out where these mystics give up, then gold will be a great opportunity. Until that happens, I don’t see that gold has quite bottomed.
But I hasten to say that if America and Iran go to war, or something else similar, I’ll be buying gold even if the price is going up. It partly depends on how the world evolves.
Either way, I do expect another chance to buy more gold over the next two to three years and I hope I’m smart enough to act.