Gold Headed To Old High, But Gains In Silver Will Be Historic

With the price of gold and silver soaring, today John Embry told King World News there is going to be a continued massive surge in the gold price, but the gains in silver will be “historic.”  Embry spoke at length about the gold and silver markets, the Fed and the mining shares.  Below is what Embry had to say in this powerful interview.

Embry:  “I’m focused on the better tone in the gold and silver markets.  It’s been a long struggle, but with all of the information that’s come out recently regarding how tight the physical market is and the fact that the paper gold market really is one of the greatest Ponzi schemes of all-time, I think we could finally be on the cusp of a huge move in gold….

“I’m not talking $100 to $200 move for gold. I mean gold going back to the old high of  $1,920 in a fairly short period of time.

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One thing that drove me crazy last week was Bernanke’s testimony and some of his statements after the fact.  Gerald Celente noted that Bernanke said if the Fed wasn’t continuing to print money, that the economy would ‘tank.’  That’s exactly what all of us have been saying on KWN for months, if not years.

But it’s interesting that Bernanke basically said as much himself, and nobody picked up on it.  Bernanke was asked by one of the Congressmen if he was printing money, and he answered, ‘not literally.’  Now what does that mean?  If you are creating $85 billion a month to buy Treasuries and bad bank mortgage debt, if that’s not printing money then nothing is.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/22_Gold_Headed_To_Old_High,_But_Gains_In_Silver_Will_Be_Historic.html

Here Is The Investment Opportunity Of A Lifetime

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

Paulson Gold Fund Down 65% In 2013

With spot gold prices down 28% year-to-date, it appears John Paulson‘s Gold Fund has managed to create some epic high-beta losses.

In a letter to investors, Paulson explains his fund fell 23% in June, is down 65% in 2013; but do not fear – as he concludes time and time again, the gold fund will “produce outsized returns in the long-run”.

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From Bloomberg:

John Paulson, the billionaire hedge-fund manager seeking to rebound from losses tied to bullion, posted a 23 percent decline in his PFR Gold Fund last month, according to a letter to investors.

The drop brings losses in the strategy, formerly known as the Paulson Gold Fund, to 65 percent since the start of the year, the firm said in the July 3 letter, a copy of which was obtained by Bloomberg News. The fund, which consists mostly of Paulson’s own money, is the smallest strategy of the $19 billion money manager and the only one to post losses this year.

The firm reiterated its commitment to investing in bullion and stocks of gold producers for protection against currency debasement as central banks pump money into the global economy. Gold dropped 12 percent in June, the most since October 2008, after Federal Reserve Chairman Ben S. Bernanke said he may start reducing bond purchases that have fueled gains in financial markets globally.

“Although the timing is uncertain, if you have a long-term view we believe the funds offer the potential for outsized returns,” the firm wrote in the letter.

Armel Leslie, a spokesman for Paulson & Co. at Walek & Associates, declined to comment on the letter.

What is there to say.

Source: http://www.zerohedge.com/news/2013-07-08/and-scene-paulson-gold-fund-down-65-2013

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