John Embry continues:

“Gold has dropped $70 from the peak and was held many times at the $1,775 level.  But I think the price action today has been pretty good.  I would have expected further weakness after Friday’s action.  We did see initial weakness in trading overnight in Asia, but gold has come back and is trading fairly well right now.

I’m encouraged, but I’m particularly encouraged because the gold stocks have started to act a lot better....

Continue reading the John Embry interview below...


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“The fact is that the mining shares remain extremely undervalued, and at some point they are going to explode in price.  That will be the precursor to a really big move in gold.

Under typical circumstances, with the weakness in the gold price and the Dow (on Friday), the gold stocks would normally have been decimated.  But for some reason the buyers dug in and the shares had a reasonably decent week.  So I think the action on Friday was extremely significant.

For some time now we have been seeing relentless demand for physical gold, and that only makes sense.  The world is awash in US dollars and most people recognize there is no solution to the US financial problems.  I think physical demand will eventually decide the match and it’s going to lead to much higher prices. 

So after the election is over, the President is going to have to confront some very serious problems coming up to this fiscal cliff, and it could be quite disruptive.  As the US tries to deal with the fiscal cliff, that will be very supportive of higher gold prices.

You have to remember that anybody who thinks gold isn’t a good investment here is voting for currency and the US dollar, and to me that’s almost an impossible argument to make.  There have been a lot of disappointments in the third quarter reports coming from US companies, and a lot of these are GDP related companies.  Their revenues aren’t very good and their guidance is even worse.”

Embry had this to say about Europe:  “As time passes, I think their problems are going to come to the surface.  There was an election in Spain, and the interpretation coming out of it was that Spain might be more amenable to austerity.  But I think it’s all noise because the numbers over there are hopeless.

You have such contrasting points of view.  The eurocrats who put this together are trying to do whatever it takes to keep Europe together.  But there is going to be some type of major event which is not factored in yet as far as I’m concerned.”

Embry also added this regarding the mining shares:  “I think there is going to be spectacular upside in the mining shares going forward.  We are just continuing to build a massive base.  The reason for the massive upside will be very simple, materially higher bullion prices. 

But the bottom line is the shares are ridiculously cheap compared to the bullion at these levels.  So as we see higher prices and some of these short positions need to be unwound, the upside potential will indeed be spectacular.”

© 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.

The interviews with Rick Rule, James Turk, Egon von Greyerz, Jean-Marie Eveillard, Bill Fleckenstein and Art Cashin (UBS $612 billion) are available now.  Also, be sure to listen to other recent KWN interviews which included, Jeffrey Saut (R.J. $360 billion), John Embry, Gerald Celente and Rick Santelli by CLICKING HERE.

Eric King

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© 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.

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