Friday, August 2, 2013

There is a Shortage of Physical Gold

"It’s not going to work. Backwardation is telling you that people are unwilling to sell their gold at a price today where they can buy it in the futures market at a lower price, and get the use of the money for three months, and they are not prepared to do it. That’s what backwardation tells you -- that there is a shortage of physical gold today and that people aren’t willing to speculate that they are going to get delivery in the future. So all of the signs point to extreme tightness in the market.

You mentioned silver (earlier), which I think will outperform gold. Even when I look at this month’s sales of coins by the U.S. Mint, they have sold 100 times more silver coins than gold coins. Yet we only produce 11 times more silver than gold, and most silver is not available for investment, yet we see this huge investment demand for silver.
So I continue to believe that silver is going to be the investment of this decade. I see wonderful statistics out of India on silver. You can just imagine that if they can’t buy gold bars and coins, maybe they will start buying silver. Well, that would just be a monstrous amount of silver that the Indians would need and there is no way that the world can supply it."

- Source, Eric Sprott via King World News, read the full interview here: