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Hathaway - Hedge Funds Short Miners are Going to Get Roasted
With gold and silver breaking out strongly to the upside, today King World News interviewed John Hathaway, Director and General Partner of Tocqueville Asset Management. When asked about what transpired with gold and silver taking off yesterday John remarked, “I said to myself this is a really big day because to me it was decisive action. I looked around for some headlines and didn’t see much, and to me it’s always best when you don’t have a knee jerk reaction to some news headline that would explain gold’s move. I think a lot of people are still mystified and basically out of the game.”
April 6, 2011
When asked if this breakout satisfied him Hathaway replied, “Yeah, because I guess we closed somewhere north of $1,450 and it was up about $22 today. I mean it looks to me like there were people on the sidelines waiting for it to come in to buy it on a pullback or maybe to cover shorts on a pullback. To me this is great action.
It was more importantly confirmed by what the stocks did. I just see three, four, five percent moves in some of the big cap stocks, not the little ones, and that’s a sign of money coming in either to cover shorts or to initiate positions on a breakout. So yeah, I think all around it was a great day.”
When asked if gold was finally going to have a massive upside move Hathaway stated, “The last time you and I talked which was maybe two weeks ago, I thought that if gold could show that it could gain footing around this level and then stay above $1,440, that would be a game changer and we could see a very quick move of a couple hundred points (dollars) maybe to $1,600 before anybody knows what’s going on, and only time will tell but that’s what it feels like to me.”
When asked if the hedge funds who have been trading long gold but short the mining shares were going to cause the shares to rocket as those hedge funds were forced to cover the short positions Hathaway replied, “In the short-term I think you could see that. Gold shares have been hesitant, acting as if gold didn’t belong at $1,440 and now that gold seems to want to stay there I think people have to revise their expectations for the gold stocks.
I keep breadth on my screen and I think it was a 9 to 1 upside day which is very, very good. You know there was nothing wishy washy about this at all so yeah, I think these hedge funds are going to get roasted.”
John manages one of the top performing funds on the planet (Tocqueville Gold Fund) which just earned a five star rating from Morningstar. Hathaway has been in the business for over four decades and knows as well as anyone that this secular bull market will end in a mania. Sadly, this time it may mean extraordinary currency collapse and an unimaginable wealth transfer. Remember what legendary Jesse Livermore said, “be right and sit tight.”
The KWN interview with John Hathaway will be released shortly and you can listen to it by CLICKING HERE.
Eric King
KWN BLOG INTERVIEWS
