“I think of all these people who live in all these countries where their currencies are getting hammered, whether it’s the Brazilians, the Indians, the Turks, the Iranians.
We’re getting more and more people all the time, all of whom have a disposition towards gold anyway. And I read this morning that the Asian demand is very robust.
Well, you know what? I’d expect it to be robust. I mean, the Indians consume 1,000 tons a year out of roughly 3,000 tons mined. What happens if all of a sudden they’re witnessing their currency weakening?
They buy 50% more. My God, the effect on the physical market would be astounding!”
“You know the debts don’t go away, right? They don’t go away, they have to be paid. The cost of debt is going up, because of interest rates rising… So it just puts a greater, greater strain on all forms of GDP, because a greater part of your GDP has to go to debt repayment, We’ve always speculated, ‘When’s it finally going to have an impact on stock valuations?’
And it hasn’t yet in North America, for sure. I would suspect it’s kind of had some impact—obviously—in places like China and European Equities and other Asian equities. So I think it’s probably likely to have an impact here in North America as well.”
“I always thought we lived in a rather enchanted world, where interest rates were zero and we kept printing money all the time. And it looks like theoretically that world has ended. And, of course, stocks haven’t done much this year.
And now we have, certainly, signs of things cracking. To wit, the 20% decline in Facebook, Netflix running into a few problems, some of the companies that are affected by exports, particularly autos…
So we have some segments of the market that are in a bear market. That’s a logical outcome of rising rates. It’s a thing you and I have talked about ad nauseam here.”
"I have told people for many years that speculating in gold can be dangerous because it’s your time frame that matter to you. Saving in gold is non-risky. Buying gold because you believe that gold is an insurance product is always non-risky.
I would take that further, however, by saying that gold stocks are almost never cheap. They are usually relatively expensive. And periods of time where the gold stocks are attractively priced relative to the bullion is rare, and this is one of them.”
With some volatile trading in the US dollar and oil near $74 a barrel, today Rick Rule told King World News that the current situation in the gold market is extremely rare.
Rick Rule:“The fact that we are starting to see increasing participation by mining companies in the open market (such as Goldcorp’s purchase of 7.3 million shares of Gold Standard Ventures), where they have no added inducement to buy, is extremely important from my own point of view…
If you add to that important observation the very recent merger and acquisition activity we’ve seen — the takeover of Dalradiun by private capital and the takeover of Arizona Mining by South32 — I think it’s testimony to the fact that while momentum isn’t in this (resource) market, while speculators are deterred from lack of volume and lack of momentum, value-oriented and industry investors are attracted to the fact that it’s cheap. At least the best companies are cheap.
And the value proposition of gold relative to US Treasuries makes me continuously bullish about (the price of) gold, although I can’t tell you very much with regards to the timing. I would suggest for your readers and listeners that they spend a little less time worrying about the gold market and think a little bit more about their reasons for owning gold and their reasons for participating in the market..."
Billionaire Eric Sprott just increased his already massive stake in one of the highest grade silver producers in the world. The Canadian billionaire just purchased another 317,900 shares of Excellon Resources (symbol EXN in Canada and EXLLF in the US), bringing his total ownership of the company to 20%. However, when Sprott exercises his warrants, he will own a staggering 27% of the high-grade silver producer.
It appears that Sprott, who believes the silver price will surge above the all-time high of $50, intends to increase his ownership of Excellon to 32%, which has already been approved by the company. A look at Excellon’s chart below reveals the company has been under massive accumulation for almost 2 years.
“I’ll tell you what I think is probably going on. When we look at the bank earnings, they say, well we need volatility in markets to make money. And you need to read through that. Well, why would you need volatility? Because we’re going to get you one way or the other, OK? And if we can get something to go up, great. If we can get something to go down, great. And would I imagine that the banks are on the other side of the trade? Yes, I would. And do they have the money to pull it off? Yes, they do… If you’ve got unlimited pockets, you can make things do whatever you want over a very short term basis.” - Source, Sprott Money
“It’s bad enough being down to 1216 or 1217, wherever we’re trading right now. But it’s the process we’re going through. As you know, I’ve expressed many times before that whenever the commercial banks say, ‘We need volatility in markets,’ well… they’re getting it! And of course they orchestrate it, I believe. And that’s exactly what we’re going through, with not only gold and silver. We see it in the oil market, where it got up to 77 and everyone gets excited, it’s going to break out, and bang! It’s down ten bucks three weeks later… So, here we are. Who knows when we get off of it.” - Source, Sprott Money
President of US Sprott Holdings Rick Rule expects commodity stocks to play “catch up." Many mergers and acquisitions in the mining business are coming, Rule predicts.
Rule says gold and silver have been weak largely because their denominated in the strengthening Dollar.
But the Dollar strength has a good deal to do with the weakness of competing currencies and economies rather than actual strength of the U.S. economy.
However, long term, Rule is optimistic regarding the U.S. economy.
“Between you and I and the listeners: As you know, what goes on in our world seems to have nothing to do with the real world, anyway, and a lot to do with what various traders illegally want to do on COMEX. And obviously they’ve had their way with us here. But it looks like they’ve cleaned everyone’s clock for the last six or eight weeks, and we’re ready to go back up… It looks like we’re in a bottoming process here.” - Source
Gold demand is picking up .. If you want to protect yourself from the vulnerabilities of currencies you have to own gold. Eric joins us from Dublin to discuss the following:
The Global demand for physical gold.
The Impending Trade Wars.
A WWU’s listener’s question on pricing structure of physical metal
Eric discusses the recent gains in gold and silver. In 2016 stocks went up 160% in six months, we could be looking for something similar in the gold sector. It’s a tiny part of the overall market that could explode quickly.
The dollar index had support at the 93 level, but it seems to have broken to the downside. If you look logically at the U.S. financial situation, you will realize that they are bankrupt.
There will be a shocking wake-up call at some point when people realize things are unsustainable and pensions can’t be paid out. There is a lot of chaos happening in politics in Washington, and it doesn’t seem like much will be accomplished.
Foreign countries are going to continue selling U.S. dollar treasuries. It’s not ridiculous to think that gold can’t go many multiples higher. The way the system has evolved is a good reason to hold gold for the next decade.
Eric discusses the ICO frenzy in cryptocurrencies and why he feels that there are too many different versions of cryptos. He prefers gold and silver but thinks cryptocurrencies may have a place especially if they find a way to tie themselves to gold and silver. He expects the market to move similar to 2001 he expects it to be volatile.
He says “I am a huge believer that metals are manipulated by central authorities when they lose control we could be looking at a sustained gigantic bull market in precious metals.”
