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Hathaway - Gold & Silver to Explode Again After Consolidation

With fierce action in the gold and silver markets, today King World News interviewed John Hathaway of the Tocqueville Gold Fund. When asked about the smash in the metals Hathaway stated, “I think people go crazy over these price changes and I understand that. I understand how it affects the psyche and all that, but the idea is you have physical (metal), it’s an asset. Whatever it’s valued at one day to another in paper money is irrelevant, you don’t price your house every day.”

When asked about silver specifically Hathaway had this to say, “My instinct is that this was too quick for this to be final. It’s like a haymaker (in silver) and it knocked everyone for a loop. Could it go to $30, could it go to $28? Yeah I suppose so, it could, but it wouldn’t bother me.

The long-term fundamentals for silver are no different at $35 than they were at $45 and what they were at $15. It’s a hard idea to get across, but I think people get too wrapped up in current price action.”

When asked about gold Hathaway remarked, “Well gold has hardly corrected. I thought silver by comparison was very spikey and for it to go to $60, it couldn’t have done it from $45 without doing this first. This is just a correction for gold that may not be over, it may take more doubters. It’s a shakeout, we had this huge run and a lot of investors and traders probably got in too late if they were short-term in their thinking, but that is not the big picture.

The precious metals markets may just chop around for a bit. After that, gold and silver should set new highs. I think people will be amazed at what gold does. Once it (gold) had the last breakout, it did tack on close to $200 in no time flat, I think it will do the same thing again on the next breakout.

You’ll see an advance that nobody gets, nobody anticipates, and it all comes down to the fact that there is a lot of money to go into a very small space. Somebody likened it to trying to put the Hoover Dam through a garden hose. If money wants to move into gold just stand back because who knows how high the price will go.”

When asked about the mining shares Hathaway responded, “I thought we had value before this happened. If I look at the benchmark that I watch gold stocks are down about 15%. That’s a good correction and my guess is we need to get some footing. I would be disappointed if on this next move higher that gold stocks didn’t start to show some relative strength.”

When asked about the US dollar Hathaway stated, “Well I did think there was going to be a rally and we’re having it. That’s good because the dollar was universally disliked, but until we get some doubters on that thesis it really can’t go lower. It’s like silver and gold on the upside, you reach a point where the rubber band is stretched and it’s on fumes in terms of the move and you have to kind of reset the process.

So it’s not a trend change, just take a couple of weeks off and come back to it. The investment thesis is not at all in question here, it’s just dynamics of the market.

A lot more will be known in 60 days because by then people will be facing a world in which the Fed is not buying every Treasury bond that is issued. At that point we will probably see more inflation than is currently in consensus views.”

Not only did Hathaway start the Tocqueville Gold Fund at the bottom of the gold market, but If you go back and look at the last 12 years of his writings, he has done an extraordinary job in warning people about the current train wreck we are experiencing in this cycle.

Hathaway has over 4 decades of experience and he is one of the great original thinkers in the business. I have always said that he is one of the most under-rated fund managers on the planet. Lately however, his fund was recognized for its massive outperformance and Morningstar acknowledged Hathaway’s tremendous accomplishments with a 5 star fund rating.

Eric King

KingWorldNews.com

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