Wednesday, 14 March 2012

Gold & Silver Manipulation, Greece, Oil & Contagion

With continued volatility in gold and silver, oil holding above $106 and ongoing worries about the Greek CDS situation, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management. Embry told KWN contagion in Europe is a major risk because of the situation in Greece, but first he had this to say about gold, silver and oil: “Jim Sinclair hit it on the head the other day when he said the central banks are scared stiff of the gold market because of their very aggressive monetary policy. They can say anything they want, but they have no choice but to follow quantitative easing to infinity. The amount of money they will create will be astounding.”
Eventually the gold market is going to realize this and it’s going to go berserk, but in the meantime the central planners can use market manipulation to keep a lid on gold. I guess it’s discouraging in the short-run, but in the long-run it means nothing.

I monitor gold’s relationship to platinum. It was only a couple of months ago that gold was trading almost $200 higher than platinum. Gold should be higher than platinum because it’s a monetary metal and platinum isn’t...

Wednesday, 29 February 2012

Gold & Silver Smash Temporary, Oil to Super-Spike

Does this mean anything in the long-run? Absolutely nothing. It’s just another great buying opportunity. I think the price will come back within days. This is just one of these momentary smashes where the speculators get cleaned out every time....

Continue reading the John Embry interview below...

“If gold and silver are going to head a lot higher from here, this is what you would expect the manipulators to do ahead of that move to make sure as few people as possible are on the long side.

This morning silver was over $37 and these guys just now had it as low as $33.68 spot. It’s embarrassing what these bullion banks do in these markets, I’m embarrassed for them. The silver market has been a paper fiasco, primarily led by JP Morgan and a lot of the other traders go with them for the ride.

With paper they have really been able to kick silver around, but there is a limited shelf life for that activity. This is primarily because the supply/demand fundamentals for silver are literally off the charts. This is going to lead to an explosion higher in the price of silver before this is over.

As I mentioned earlier, the open interest has been blowing out and the usual suspects have been trying to hold back silver. We may struggle briefly as they flush out the speculators. Having said that, one of these moves, and this may be the one, when it does breakout it’s going to get beyond a certain level and the shorts are going to panic.

You interviewed Dan Norcini yesterday, who I have an enormous respect for and he was talking in that vein (shorts panicking). Well, today the shorts are trying to get things under control again. The bottom line here is we will see a big move to the upside in short order because you have a tight physical market and that’s going to cause the price to explode higher.”

When asked about gold, Embry responded, “We are going to see the same thing happen in the gold market. Even though they smashed the price down over $75 at one point to $1,706 spot this morning, it doesn’t mean anything. So they clean out some speculators and then the advance continues.”

Embry also added this regarding crude oil: “There are two aspects. Obviously the geopolitical issue is huge. I hear from quite well informed sources that Israel will attack Iran. If that happens, who knows where the oil price will go?

There is another aspect to the oil price and that is the debasement of money. Many savvy players are looking at what is going on with these LTRO’s and the hopeless situation in the United States and they know that will underwrite a much higher oil price.

When you throw the geopolitics in I don’t have a problem with $150 to $200 oil, under the right circumstances, in the fairly near future. It is worth noting that the negative impact this would have on the global economy would be astounding.”

With gold at one point trading over $75 lower and silver down over $3, today John Embry told King World News this is nothing more than a temporary smash and he expects both metals to come roaring right back. Embry, Chief Investment Strategist at Sprott Asset Management, also said oil may quickly spike to a number that will literally cripple the global economy. But first, here is what Embry had this to say about silver: “This relates to the massive blowout in open interest in both gold and silver over the last few weeks. The market is always vulnerable short-term in that situation. Central planners can’t announce they are going to have constant and massive QE or everything would go to the moon. So the idea is floated around that QE3 is off the table.”

Thursday, 16 February 2012

“The Current Financial System Will Be Totally Destroyed“

Mr. Embry, the perhaps best report I have ever read on the gold market was “Not Free, Not Fair: The Long-Term Manipulation of the Gold Price,” written by Andrew Hepburn and you. (1) I would like to talk with you at the beginning about the findings of that report. First of all, why do you think it is relevant whether the gold price is free or not?
John Embry: Thank you for the very generous compliment. It is essential that the gold market be free. It functions as the so called “canary in the coal mine” and its price should be allowed to reflect excesses in a pure fiat monetary system. The continued suppression of the gold price was a key factor in the many financial bubbles which have essentially wrecked the monetary system as we know it.

What has the evidence been that the gold market isn’t a free market?
John Embry: Our report which was written 7 ½ years ago revealed all sorts of chicanery in the gold market and we only used evidence which could be corroborated. Considerable additional evidence has piled up subsequently but two smoking guns are the repetitive counter intuitive price action and evidence of widespread clandestine leasing of western central bank gold.

Who are the ones that don’t like a free gold market and which objectives do they have in mind by preventing a free gold market?
John Embry: The western governments, their central banks and the allied bullion banks are the culprits. They view gold as a mortal enemy of the fiat currency system. Gold has been real money for centuries and every paper money system in history has ultimately collapsed. This drives them to continuously denigrate and manipulate gold.

Through which tools is the gold price “managed“?
John Embry: The worst damage occurs in the so-called paper gold market where derivatives, naked shorting, vicious margin hikes, etc. are employed to fleece the long side who don’t have as deep pockets. In addition, the western central banks have supplied the physical gold necessary to effect the plan through their leasing.

Recently, I was told by a former chairman of the Federal Reserve, Paul A. Volcker, that to his best knowledge “the U.S. has not intervened in the gold market for more than 40 years.“ (2) Do you think Mr. Volcker has the truth on his side?
John Embry: Mr. Volcker admitted that the U.S. had made a mistake by not intervening at one point in the gold market some 40 years, so to think that nothing has happened subsequently is extremely naïve. Technically he might be correct in the sense that swaps could have been employed and the intervention using U.S. gold could have been conducted by another party. Recently retired Fed Governor Kevin Warsh acknowledged U.S. gold swaps in correspondence with GATA just last year. (3)

Wednesday, 15 February 2012

Is Greece’s Situation Bad for Gold?

With gold and silver continuing to consolidate, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management. Embry told KWN that we have seen “peak gold.” He also filled us in on what the Greek situation really means for gold: “Gold is in a bit of a stranglehold here and has been since almost the beginning of February. It sort of coincides with this whole Greek saga where they seem to have a solution every morning and by the end of the day somebody points out another flaw. I think this is extremely bullish for gold.”
People say keep an eye on Greece because if they don’t come up with a solution it’s bad for gold. I think that’s ridiculous. The fact is if the price weren’t so manipulated it would be continuing to roll ahead because there are no solutions to these various problems that are plaguing most areas of the world today.

I’ve had a strong view for a considerable period of time and it was certainly reiterated by my great friend Murray Pollitt, who unfortunately passed away a week ago. Murray was a real student of the market and gold mining because he started a gold mining company and he was around the industry for 40+ years.

Murray and I would share the same opinion that all of the low hanging fruit (gold) in the world has been picked. Underground mining has gotten extremely difficult. What stepped in and really grew gold mining production in the 80s and 90s was the open pit explosion, which was a new technology at that point....
So what’s essentially happened there is all the easy open pits, of decent grade, have been mined or are in the process of being mined. Consequently, you are continuously being faced with lower and lower grades and you are having to go to more geopolitically unpleasant places to find gold.

So I share the opinion of Aaron Regent, CEO of Barrick (Gold), who a couple of years ago in a speech in London actually alluded to ‘peak gold.’ Meaning the annual production (numbers we have seen) may not be exceeded again because of the problems that I just mentioned.

So anybody that believes the gold price rise is going to be alleviated by added supply from the mining sector I think is wrong. I think the business is going to be very hard and if you do have a company that is mining a decent quality ore body, in a geopolitically attractive area, you’ve got a great asset.”
From King World News

Tuesday, 7 February 2012

Gold’s Rise Will Shock Market Participants This Year

With gold trading roughly $30 higher and silver breaking solidly above the $34 level, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management, to get his take on where he sees gold and silver headed from here.  Embry told KWN this will be, by far, the strongest year for gold during this entire bull market.  Here is what Embry had to say about the situation:  “The fact that sentiment is so poor with gold at these levels just indicates that people don’t realize what’s really unfolding.  I think the price action to begin the year has been exemplary.  It was interesting as gold was getting a head of steam going last week, out comes that bogus jobs report that led to the one day reversal in gold and silver.”
John Embry continues:

“Accompanying the phony jobs number were all sorts of wonderful headlines in the mainstream press about how the US economy was firm and there were signs of recovery and so on.  The fact they said there were 243,000 jobs created is ridiculous.  When you couple all of this with the fact that sentiment in gold and silver is so bad, this sort of quiet gain, I mean gold has risen the better part of $200 since the end of the year, that’s a lot in a short period of time.

I still believe this is all just a precursor to what will be the finest year we’ve ever had in this bull market.  The best up year, so far, in this gold bull was 36% and I would be surprised if that number were not obliterated this year.  This will continue to be a very strong year for the precious metals and it will leave many market participants shocked.”

When asked about silver specifically, Embry remarked, “At Sprott, as you know, we are very bullish on silver.  Silver is just biding its time and it’s building a massive base in here.  There has been a huge short position in the paper market, which has had a huge impact on the price.  I think that will pass and right now as the physical market has become  extremely tight.

This indicates, to me, the paper shenanigans that have really plagued the silver market have a finite life now...

John Embry - Silver to Break $100 in 12 to 24 Months

Many traders have been shocked as gold has already risen $120 off of the recent lows. But silver, which has been quiet for some time, may finally be ready to make a move. Today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management to get his take on where he sees gold, silver and the mining shares headed from here. When asked about the action in gold, Embry said, “Well, I think it’s putting in a reasonable performance. I’m not going to be excited by gold’s performance until it breaks away from the shackles of the gold cartel and goes up, on a given day, by $50 or $100. Day to day gains are still being limited to 2%.”

John Embry continues:

“Today, China’s gold imports from Hong Kong show they have been going ballistic. These are staggering numbers. Where is the gold coming from? It has to be coming from Western central banks or the back door of the gold ETF. This is wildly bullish and I think there are lots of short positions in the paper market, so I wouldn’t disagree with (John) Hathaway that we will see a short squeeze in gold.

The fact that we had a bad past 4 months, in 2011, has absolutely no impact on the future price of gold. I believe, in 2012, we will easily reach $2,500. That means a 60% rise over the year end close in 2011 and I think that may end up being conservative. So I think, as an example, Rob McEwen is dead right when he says gold will accelerate to the upside as it breaks through $2,000.

The rise we are discussing is the perfect scenario for a massive move in the shares. People who believe the shares are only for trading and will never experience any real action to the upside are not invested in the shares and they are dead wrong....

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