With gold holding on to gains above the $1,650 level, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management, to get his take on where he sees gold headed from here. Embry informed KWN that gold was very close a major breakaway move to the upside. Here is what Embry had to say about the situation:
“I’ve been of the mind for a considerable period of time that the gold price really wouldn’t accelerate to the upside until such time as the physical market finally overwhelmed the paper market. But I think we’re reaching the stage now where there is mounting buying of physical because people are starting to realize the paper price is fraudulent.”
We’re very close now to that important moment where the physical market actually does overwhelm the paper market, and as this takes place you will see massive moves in the price of gold. I will finally be convinced the physical market has gained ascendancy when the gold price is going up 4% or 5% a day or $100. That’s going to happen.
The ‘London Trader’ is right when he says there is a lagging effect from the physical purchases which is later reflected in the price. In the end, the Achilles heel of the paper manipulators is they have to be able to get enough physical gold to handle demand. So, I agree with the London Trader there is a delayed reaction.
I’ve had this discussion with a friend of mine, who was very active in the gold market of the 1970s, and he witnessed the London Gold Pool supplying as much gold as was necessary to keep the price suppressed. But at some point the entities working the London Gold Pool realized they only had a finite amount of gold. Even though they hate gold, they realized they couldn’t sell it all....
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