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Robin Griffiths - Here is the Reason Gold Spiked $75 in 2 Days

With gold and silver moving to the upside, today King World News interviewed one of the top strategists in the world, Robin Griffiths of Cazenove out of London. Cazenove Capital is the appointed stockbroker to Her Majesty The Queen. When asked about the recent strength in gold Griffiths responded, “The Indians, at the margin, buy more gold jewelry than anyone on the planet. Diwali is the ‘festival of lights’ and it’s today. This is when they buy the jewelry. Then it is followed by the wedding season when the Indians buy even more gold. So frequently this festival makes the seasonal low for gold. The rise in the last 24 hours is Diwali, it’s the Indians doing it.”

Robin Griffiths continues:

“I’m personally long gold and if there were to be a fall, anything under $1,600, I would just buy some more. When you look at Greece, it is un-savable. It doesn’t matter what kind of cunning plan Mrs. Merkel comes up with, the fact is Greece is bust. The cunning plan will only kick the can down the road, it doesn’t solve the problem.

Italy owes 1.9 trillion euros, but it owes it to other Italians. Although it is the biggest, most indebted nation in Europe, it owes it to itself, just as Japan owes its money to itself. Therefore, that’s much more sustainable than when you owe it to a bunch of foreigners. It means you should be less worried because of the Italian debt than the smaller figures for Spain or Portugal.

The Europeans are talking about a bazooka, but the numbers they are coming up with aren’t big enough bazookas really. They will take a hit on the bonds they have and they will basically delay the crisis. But the de-leveraging of the debt mountain hasn’t even been addressed. That’s why after a rally we have to fall again next year.

If you assume contagion, i.e. it will go from Greece to Portugal immediately, Ireland, then Spain, then Italy, they will need to print 3 trillion euros. Any bazooka smaller than three trillion euros is not big enough. It’s all about confidence isn’t it. I would say any number smaller than 3 trillion doesn’t get it done....

Continue reading the Robin Griffiths interview below...

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“If we go into a panic mode and the dollar goes up and risk comes off the market generally, that would probably equal a setback in gold and commodities. My take at the moment is we are not that panicky and therefore we are going to have a rally now of most commodities into the New Year.

They probably will go a bit wobbly again next year and come back, so the real buying level, in my opinion, is going to be established in 2012, rather than 2011.”

When asked if that will be the final buying opportunity before major strength in phase II, Griffiths stated, “Yes because by then you will have had your landing in both India and China. We may have already had a landing in India. And I don’t believe myself in the hard landing scenario for China. Plenty of people are forecasting it, but the latest growth figures came out at 9.1%. That isn’t a landing, in my opinion, that’s a flight path.

The long-term secular trend for commodities is absolutely linked to the long-term growth of India and China and I’m a bull on that. So the dips are therefore cyclical corrections in a secular uptrend and that’s a good place to be, you buy them. I mean recently I told your listeners to buy Rio Tinto and BHP. Rio is now up 25% in three weeks and BHP is up 23% during that same time. They were just astonishingly cheap.

Everything I see in the numbers and when I go over there is China’s economy is functioning well. They did have some bubbles but they are squashing the bubbles out of it. They have cooled the economy. As I said the economy is growing at 9%, that’s pretty good to me.

China does not have an agenda to save the Western world, but if the Western world sorts itself out, China will then back it. They will buy the euro once the Europeans have come up with a credible plan.”

Eric King

KingWorldNews.com

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