With gold and silver getting consolidating, today John Hathaway spoke with King World News about what is happening in the war on precious metals. Hathaway also spoke about the gold and silver shares and what is taking place in the industry. Hathaway, of Tocqueville Asset Management L.P., is one of the most respected institutional minds in the world today regarding gold, and his fund was awarded a coveted 5-star rating.
Hathaway: “As far as gold goes, it looks to me like we have made an important low. A couple of people I respect have called it, McClellan would be one of them. I don’t know if that means we rocket higher, but it seems to me we have seen the worst….
“McClellan is basically a neutral market observer, and they are seeing very constructive signs from a purely technical point of view. As far as the shares go, they have to take their cue from gold.
I think that gold has to lead higher, and then I think the shares will respond. Most of the commentary I see from the ‘sell-side’ is kind of like closing the barn door after the horses have run out. They are basically doing these very Draconian scenarios with gold not moving above $1,200 — what companies survive, which companies don’t, that kind of thing. So there is very little discussion about which companies would be really well-positioned in a higher gold price environment.
When I look at the economy right now, it’s very weak. I see poor housing starts and retail sales. Corporate guidance has also been very lackluster. I thought the UPS number was very interesting in the sense that they are seeing lower volumes, particularly from the manufacturing sector. So the whole pattern to me reflects a very soft economy.