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Ben Davies - Look For Another Short Squeeze in Silver

With gold exploding higher, taking out Jim Sinclair’s $1,650 level that he predicted so many years ago and silver above $40, today King World News spoke with Ben Davies, CEO of Hinde Capital to get his take on the markets. Ben predicted the extraordinary rise in silver, then predicted the crash and subsequently moved back to the bullish camp on both metals. When asked about the action in gold Davies stated, “It feels that people are trying to fade the move. I think that they are observing that there is a potential resumption to the US debt ceiling situation. Obviously we’ve had a form of resolution. We’ve also had a resolution with regard to the European Union. The actual format has been put down, but whether or not it transcribes as they say is another matter and quite frankly as I’ve said before, it’s a mathematical certainty that these countries GDP’s are falling off the cliff globally.”

Davies continues:

“When growth slows to the extent that it is now, there are no revenues being procured through taxes and as a consequence the fiscal burden is only going to get harder. So I think we are in a no-win situation for these governments, we definitely have gone into that tipping point. What we are experiencing here is individuals globally are really beginning to understand that gold is nobody’s liability, it is the one asset that can protect them from the fallout from this particular ongoing crisis that started in 2008.”

When asked about silver Davies said, “Well clearly silver had such a phenomenal rise, we made the analogy that it was like the releasing of a cork being held under water and you release that cork and whoosh up it rushed! Certainly along with many others in the market we understood the perhaps vile manipulation that was going on by some of the larger houses who, as we know, occupy that space. Clearly their positioning has been reduced substantially. I think that after you’ve had such a large move, the market has to acquiesce for a period of time, which is what we’ve been seeing....

Continue reading the Ben Davies interview below...

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“There is probably a misinterpretation that the industrial usage for silver will fall. The reality is that the industrial usage is very much alive and that physical demand will definitely remain strong. There have been a lot of houses recommending short silver, long gold positions and I wonder if gold continues its move here, as I suspect it will over the coming months, that at some point there will be another short squeeze in silver.”

When asked about sentiment Davies stated, “Sentiment may be high, actually I had a main stream reporter call me from a newspaper and said, ‘Hey I’m going to write this piece about popular culture and you know it’s all the talk at cocktail parties’. And that’s just it, it may be all the talk, but it’s all hot air, nobody really owns it (gold). I mean I’ve just come back from a meeting where a very large UK allocator said they’ve had their portfolios short gold, actually short gold for the last 18 months.

Then I went to another one, again very large private bank in the UK and they told me they had cut from 6% to 4% their holdings in gold over the last ten months. So for my mind there is no participation. The market is going to be higher over the next four months. The market is making it very difficult, it feels like it is going to make that move with not many people on board.”

There is so much great information regarding the gold and silver markets in Ben’s interview. The KWN audio interview with Ben Davies is available now and you can listen to it by CLICKING HERE.

Eric King

KingWorldNews.com

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