With the U.S. dollar trading lower once again and the metals consolidating recent gains, today a 50-year market veteran discussed what’s next after one gold and silver index soars 135% in just over 3 months!
Eric King: “You have to be very careful not to simply use the COT Report (on gold and silver) because it can be a fairly good timing tool on the way down, at bottoms — and it’s not perfect at that, but on the way up it’s very difficult. And I know we’ve had a lot of people calling tops, and these (calls) were at much lower prices.
And the problem with calling those tops is that the commercial COT Report, it’s not going to give you those answers that easy. I remember one time when I was speaking to Ted Butler and the commercials were 100 percent short (on a historic basis) at that time on silver and the price was $6. What happened was the price of silver proceeded to surge 40 percent higher to $8.40, before then collapsing back down so the commercials could try to get healthy on those positions…
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So, it (the COT) is not a timing tool on the way up. If you are trading (positions) and you get to a point on those trades where you think that’s enough profit and you want to book those profits, that’s great. But if you are in (core) positions for the long-term, be very careful about losing those positions. I know when the COT got rough (with the commercials heavily short), some people sold Agnico Eagle at (U.S.) $33 a share. That stock is $47 today.
If you lost your position in that stock, it’s almost 40 percent higher and you are wondering, ‘How am I going to get back into this (Agnico Eagle)?’ So some were too tricky and they lost their positions. And that’s what you don’t want to do in bull markets. You just have to be right, you have to sit tight, and you have to stick with the high quality shares.
Now, there are going to be pullbacks. Will there be a 10, 15, 20, 25 percent pullback in the shares (that could start at any time)? Yes, that can happen. But it would just set up the final leg (of the secular bull market in precious metals) because that would be the last great buying opportunity of what is going to end in a mania. (Richard Russell repeatedly warned that the secular bull markets in gold, silver, and the mining shares would end in a mania). So you have to be very careful about losing your (core) positions (in the early stages of the final up-move of this secular bull market in gold and silver).”
50 year market veteran John Embry: “Your point is really well taken and it was well said. What’s happened here is you’ve had the HUI Gold Index, which is a very representative index of the gold shares, and it’s risen (a staggering) 135 percent since January 19th, with only minor corrections. You’ve barley even noticed the corrections.
This (action) is unusual, and I think it bespeaks two things: First, how cheap gold and silver bullion were. But more importantly, I had never in my entire career, and I’ve been at this a long time, seen the stocks cheaper in relation to the bullion, even when the bullion was beaten down. So this was a fantastic opportunity. And I would really encourage people…To continue listening to the remarkable audio interview where 50-year veteran John Embry discusses what’s next for the gold and silver markets CLICK HERE OR ON THE IMAGE BELOW.
***The last time legend Rob Arnott was interviewed on KWN he recommended a specific fund to the global listeners, including the ticker symbol. In less than 3 months that fund has returned more than a staggering 26 percent! Arnott again gave specific recommendations for the global listeners and he also discussed the coming inflationary carnage that is in front of us. To hear his latest recommendations you can listen to his powerful audio interview by CLICKING HERE OR ON THE IMAGE BELOW.
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