The Price Of Silver Is Set To Soar As Inventories Collapse

With continued volatility in global markets and oil still trading near the $106 level, today John Embry told King World News the price of silver is set to soar as inventories continue to collapse.  Embry also spoke at length about the gold market.  Below is what Embry had to say in this powerful interview.

Embry:  “I am becoming far more comfortable with the gold and silver markets after what can only be construed as an extraordinarily ugly few months.  These violent takedowns in the paper market, which bore no relation to what was going on fundamentally, have discouraged so many people.

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I guess price action is the thing that drives them crazy because people then start to doubt the fundamentals.  But what I see now is very promising….

“I see falling gold inventories almost everywhere.  We have seen how much gold has come out of the ETFs, and how much the COMEX inventories have shrunk.  And the gold that JP Morgan holds for its customers in its own accounts has also dwindled.  All of this is a precursor to a much higher move in the gold price.

At the same time I am getting extremely excited about silverEric Sprott’s revelation about all of the silver going into India because of the difficulty in that country obtaining gold due to official impediments, I think it’s a classic case of unintended consequences on the part of the Indians.  The last thing the silver market needs is a huge new demand source in terms of trying to keep the price under control.

I am also seeing that JP Morgan is feverishly trying to acquire as much physical silver at the same time they are reducing their paper short position.  So I don’t think we have much longer to wait for a real explosion in silver prices.  And if I’m right on both gold and silver, this will be seen as the single finest buying opportunity in the entire bull market which is now in its 13th year.”

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/16_The_Price_Of_Silver_Is_Set_To_Soar_As_Inventories_Collapse.html

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Rule: “The thing that is most interesting to me right now is the turbulence in energy markets. The energy markets are so large and there has been such incredible turbulence in them that it has definitely caught my attention. The focus of my financial attention has been attempting to get either debt or equity deals done among the micro-cap issuer community in junior mineral or exploration companies. In that I have been unsuccessful….

Eric King: “The sentiment on gold and silver is at the dead lows even though the metals have bounced here.”

Rule: “I think that’s a continuation of an earlier theme, and I don’t think people are paying attention. In the gold and silver markets you have been seeing the futures market for a substantial period of time setting price, as opposed to the physical market.

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At the same time you are seeing the selling pressures that drove the physical market lower begin to abate. Those selling pressures were the unwinding of leveraged, momentum-driven carry trades. These involved either gold futures or the gold ETFs.

All of this has resulted in a massive accumulation of physical gold and silver into very strong hands. This involves players in the Eastern hemisphere, as well as retail investors who are unleveraged, that are buying physical gold and silver.

We are also beginning to see the futures markets bottom out at the same time the physical market is incredibly strong. We have also seen the gold lease rates have gone up fairly substantially. This strongly suggests that a lot of the physical gold, which was in bank hands and available for leasing, has been disposed of into the physical markets.

These are fairly bullish signs. I can’t tell you exactly how it’s going to play out, but I do believe that at the very least, in the near-term, the gold and silver markets will stabilize.”

Eric King: “With things as decimated as they have been in the gold and silver space, many times you see markets come out of the hole and it doesn’t really take news to drive it. The markets just start going higher.”

Rule: “You are exactly right. What happens is that you exhaust the sellers. The interesting thing is that the buyers are somewhat exhausted too. It’s sort of like two ‘world class’ fighters who have been battling for 13 rounds and only have 2 more rounds to go, but neither have much energy left to hit each other.

But what you just said is exactly what I’ve experienced in past market cycles like these. The stocks start to move up because they stop moving down. Again, you exhaust the sellers. Everybody is looking at tax loss selling this year, but people forget that you have to have some gains to shelter with the losses. And U.S. speculators haven’t done that.

Furthermore, in Canada where you can take losses this year against gains that you acquired in the three prior years, what you are finding is that the people usually were able to use up those prior gains with last year’s losses. So I suspect that tax-loss selling this year will be much less pronounced than it has been in earlier seasons.

I strongly believe that the highest quality mining shares will move higher the rest of the year, and I certainly believe that the worst of the pressure is off of the junior stocks. There has just been a lack of buyers to meet the lack of sellers.”

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/12_Rick_Rule_-_Here_Is_The_Investment_Opportunity_Of_A_Lifetime.html

European Gold Buying “Remarkable”

Here’s National Numismatics’ Tom Cloud with a quick dealer-level view of gold and silver:

DollarCollapse: Hey Tom, it’s been an eventful few weeks. Precious metals pierced your worse-case downside targets and then bounced a bit. What’s going on out there?

Tom Cloud: Once gold broke the $1,320 it didn’t stop till $1,180, which I did not think it would do. It went all the way down to our long-term support line. Looking forward, July is usually a neutral month and August is when things pick up. Gold and silver usually make about 2/3 of their profits during the last four months of the year, but this time gold should start moving in July because the correction was so severe. The worst-case scenario is that it bounces off of $1,180 again, but it looks very oversold at these levels; the charts have turned extremely bullish.

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DC: How tight are supplies?

TC: For gold, there’s pretty good availability right now. We’ve got some gold coins that can lock in and ship today.

DC: Silver premiums remain high though. What’s different about that market?

TC: When silver goes down the costs of buying and producing it make the premium go up in percentage terms. They usually change the premiums every two or three months. So the high premiums can be explained in part by the continued shortage of popular coins and in part by unchanging production costs.

DC: So silver supplies remain tight?

TC: May broke all records for silver eagle sales, and you’re still looking at 2-4 week delays for eagles, maple leafs and even buffaloes. Comex silver bars are really hard to get. Johnson Matthey is six weeks behind. In normal times, it would take 3-5 days for delivery. The Royal Canadian Mint is keeping up, though, so we can get those bars.

DC: What about the recent central bank gold buying?

TC: The bounce was facilitated by a 580-ton purchase by European central banks on Friday. The rumor is that they’re going to buy another 500 next week. There’s only 2200 tons a year mined on average, so that would be remarkable.

Source: http://www.financialsense.com/contributors/john-rubino/european-central-bank-gold-buying-remarkable