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Ben Davies continues:
“With record buying on the Shanghai Exchange last month, this bodes well for this quarter and the Chinese New Year that will come during the January/February time frame. With Diwali upon us now and gold in rupees looking attractive, we believe that we will see the gold market go knocking on our $2,000 target by year end.
The paper side of the market has cleared and it’s created a very bullish setup on the COMEX. It allowed the physical to start taking precedence. Gold did not breach the $1,600 level again and as we discussed previously, we didn’t think that was a level it liked trading at. There were substantial buyers there.
If you blinked, you missed the opportunity to buy it several times. The power of the move back up, yet again, puts pain to the naysayers in the gold market. Many of them have been late to the party and have never really understood why the gold market is trading where it is.
The European bail out is farcical. As used, it’s an insurance policy to obfuscate the reality that there is no capital available to bailout all of the sovereign entities and to help maintain a pretense that France, in particular, will maintain its AAA rating. I’m sure France’s credit rating will fall in the months ahead.
The market will continue to attack the periphery bonds and now the AAA rated market because the reality is quite clear to all that the banking system and national accounts of these entities are empty, they are bankrupt.
This policy action in Europe is giving other countries the excuse to turn on the monetary spigots. Japan has increased their quantitive easing. The UK has done QE and even emerging markets such as Brazil and India are starting to move to cut rates. China, no doubt, is sitting with its own batch of non-performing loans within the banking system. They will also begin to cut rates.
We expect all of this will continue to underpin the gold and silver markets.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
Ben Davies - One Chart Says it All, Extremely Bullish for Gold
With gold trading around $1,730 and silver near $35, today King World News interviewed Ben Davies, CEO of Hinde Capital, to get his take on where the gold & silver markets are headed. Ben sent KWN the above chart on gold and commented, “You really don’t need to say much when you look at the chart, it’s extremely bullish. We took the current year and pushed it forward four weeks to adjust the seasonality. We realized that the market was working on a four week basis ahead of time and if we adjusted the seasonality by bringing it forward four weeks, readers can see that come October we were going to actually have a rally into the year end. Historically you would tend to see a dip in October, but we already had that dip in September.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
October 28, 2011
