Eric Sprott continues:

“So it’s obviously going to increase the demand for gold and we have seen some data that China has been a rather large buyer of gold.  People will consider it a currency and it has to necessitate more buying.  You know, Eric, I think one of the really interesting things that happened was the imports of gold into China, from Hong Kong, which always were less than 20 tons a month, all of the sudden, beginning about 5 months ago, went 20 (tons), 30, 40, 80 and in November 102 tons.  102 tons is a staggering number.

The world mines, excluding China, less than 200 tons a month.  China cannot continue to buy 102 tons and not have the price escalate dramatically.”

Sprott had this to say about today’s Fed announcement that it will leave rates at zero until late 2014:  “Obviously it’s dramatic what has happened.  It would appear there will be no restraint whatsoever on the part of the Fed.  Assuming this announcement causes gold to break its declining wedge, which I believe it has, I expect some serious fireworks to the upside.”

When asked about his latest PSLV offering, Sprott stated, “We closed on $349 million.  The underwriters did exercise the over-allotment in rather short order.  We have committed to purchase it (silver).  I think the deal was very successful.  Obviously the premium has come down here (on PSLV), but it’s typically traded at a 16% premium and right now it’s at 8%.  It takes a little while to digest the stock that was issued, but I’m hopeful we will get back to where we were.

There’s been a big move since we did the issue.... 

Continue reading the Eric Sprott interview below...  


To hear which company $10 billion Sprott Asset Management and Sun Valley Gold

are the largest shareholders of and why click on the logo:

“We’ve all heard the reports that it’s pretty tight (in terms of supply).  Every data point I see suggests people and institutions want to buy silver in the same dollar amount as they are buying gold.

We see the US Mint has sold 5.6 million ounces so far in January and I’m sure they will have a record high month.  We’re selling as many dollars of silver coins as we are gold coins by the mint, which means we are selling 50 times more physical volume of silver.  The availability (of silver to gold) is 7 to 1 in physical, but people are buying it at like 50 to 1.  So something has to give there.

I would love to share with your viewers I was speaking with a company, this is a gold company, who is trying to organize a dividend payment being made in gold or silver and/or cash.  Apparently 60% of the people (asked) were opting for the precious metal and half of those agreed to take it in silver.  Again, another confirmation of silver buying.  Our last tranche (in PSLV) we raised $349 million. Our last tranche in gold we raised $312 million.  Again, one to one buying, so I’m pretty upbeat about where silver should be going.

As you know I always thought we would go back to the 16 to 1 ratio to gold, which means based on today’s prices silver should be $100.  I really do believe silver was going to blow through $50 back in April/May when, all of the sudden, margin rate increases came through and one billion ounces of paper silver was sold that day.

I’m of the feeling that it will go back through $50 this year.  Once it goes through $50 I think it could take on a whole new life and really energize itself.  Longer-term my target is 16 to 1 to gold and I’m very upbeat on gold.  I’m sure gold is going north of $2,000 this year, so obviously silver can get up to $150 in due course.” 

When asked if there has been traction with regards to his call to silver companies to hold physical silver instead of cash, Sprott replied, “There has been traction.  One company, Endeavor Silver, only sold 1/3 of their output in the December quarter because they thought the price was being depressed.  They decided to wait and sell it at a different time.

We did have one silver producer actually participate in the PSLV (offering), which was very encouraging to me.  I think we’re making a little bit of momentum on that front.  Of course, I’ve given lots of chats to silver producers about what I think has gone on in the silver market.  I think we’re making some progress.”

The KWN audio interview with Eric Sprott is available now and you can listen to it by CLICKING 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.

Eric King

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