John Embry continues:

“We’re very close now to that important moment where the physical market actually does overwhelm the paper market, and as this takes place you will see massive moves in the price of gold.  I will finally be convinced the physical market has gained ascendancy when the gold price is going up 4% or 5% a day or $100.  That’s going to happen.

The ‘London Trader’ is right when he says there is a lagging effect from the physical purchases which is later reflected in the price.  In the end, the Achilles heel of the paper manipulators is they have to be able to get enough physical gold to handle demand.  So, I agree with the London Trader there is a delayed reaction.

I’ve had this discussion with a friend of mine, who was very active in the gold market of the 1970s, and he witnessed the London Gold Pool supplying as much gold as was necessary to keep the price suppressed.  But at some point the entities working the London Gold Pool realized they only had a finite amount of gold.  Even though they hate gold, they realized they couldn’t sell it all....

Continue reading the John Embry interview below...


To hear legendary Jim Sinclair discuss which company he believes

is the best investment and why click on the logo:

“I think we’re getting to that point once again, and that will be the inflection point that will kick off the physical explosion in the price.  I’ve been surprised the suppression has gone on as long as it has.  The gold has been coming out of the Western vaults through leasing, but I believe that has a very finite life now.

The minute this thing gets away and we start to have a real market and prices start to reflect real supply/demand, it will bring in a lot more demand at the same time supply is being diminished.  This is why you’re going to have price moves of staggering dimensions. 

What we are seeing, to date, is just the beginning because the market has been rigged the whole way up.  But the fact is gold has risen from $250 to as high as $1,925 and that just reflects the power of the fundamentals.  We haven’t seen the market break away from the rigging, which it will, and that’s when the huge moves will happen.

The technician I have the utmost respect for is Alf Fields.  When I was at a conference in Australia, last November, Alf told me he believed gold had bottomed and would not break $1,500.  He has now stated the bottom is in and his next major target is $4,500 on gold.  That’s roughly a triple off the lows.  That, alone, would kind of support the idea the physical market is going to gain ascendancy.

We will have $100+ up-days in gold.  Right now it’s hard to believe, but we are going to see moves that will be staggering to market participants.  You could see moves, to the upside, of hundreds of dollars in a day.  When you say that, you almost lose people because they cannot conceive of that type of action yet.

If you contrast where we are versus the 70s, we are probably in the ’74 to ’76 time frame.  So the big move in gold is still ahead of us.  This time the moves will be greater because there is less physical gold available and conditions are infinitely worse.  That’s where people get those numbers for gold like $10,000 and I could certainly see something like that happening.”

© 2012 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

To return to BLOG click here.

© 2012 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.

Subscribe to RSS
KWN Blog