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Caesar Bryan continues:
“We are a little bit overbought in gold, but the fact that a lot of people are talking about the commercial short position and a coming correction, as a contrarian, to me this means it may not happen. I’m picking up quite a bit of chatter where people are worried about the short-term.
Let me just say once again that because of the overwhelming fear of a correction here, it may not happen. Right now it’s very healthy because as I see it gold is climbing a ‘wall of worry.’....
Continue reading the Caesar Bryan interview below...
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“In the short-run I’m impressed that gold is trading in the $1,770s. Gold hasn’t given up much ground, and the next move will likely be higher. We spoke last week about how the gold market has been stair-stepping higher. So the action has been very impressive indeed. The stair-step pattern also suggests there is underlying strength in terms of gold demand.
Evidence of this is the number of central banks continuing to add to their gold holdings. As I mentioned earlier, some people have been worried about the resistance in gold at the $1,800 level. Having said that, if you are a long-term investor who is looking at the underlying fundamentals, any weakness in gold is simply an opportunity to add to your position.
I would also add that In the world of politics and macroeconomics there doesn’t seem to be any improvement. We’ve had the policy statements from the European Central Bank and the Federal Reserve, and they have clearly staked out their territory.
They are going to be very proactive in printing money. This is negative for fiat currencies, and positive for real assets. Gold is the key asset because gold is money. But the situation in Europe is not improving and deficits continue to rise.
Policymakers in Europe just want to maintain the euro, so the news flow coming out of Europe is going to continue to be massively supportive for gold. The same is true for the US in terms of news flow. The Fed is on another money printing spree and this will provide a great tailwind for the gold price.
Charles Evans’ comments the other day were very supportive of what the Fed already said they would do in terms of supporting asset prices. Clearly their mandate shifted from inflation to unemployment. So this means more money printing, purchasing of assets, and higher prices for gold.”
Bryan had this to say regarding the mining shares: “The mining shares have been trading well the last few months. Since the middle of July, as measured by the XAU, they are up about 30%. That compares to less than a 15% move for the gold price.
So it’s very clear now that gold equities are outperforming the metal. Taking the message of the gold equities, we should expect to see higher gold prices going forward. On any weakness investors should be adding to positions in the quality mining shares.
The top shelf mining companies are income producing, and you are buying gold at a big discount in the ground. I believe the opportunity is here right now in terms of the shares.”
© 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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Eric King
Massive Fear In Gold Means We May Not See A Correction
Today 25 year veteran Caesar Bryan surprised King World News when he said that everyone is looking for a correction because of the increased commercial short position in gold, so we may not see one. Bryan, from Gabelli & Company, stated, “... because of the overwhelming fear of a correction here, it may not happen.”
Here is what Caesar had to say: “I think all of the worry about the commercial short position in gold and silver is just short-term noise. To the extent that can help in somebody’s trading activity that’s fine, but it’s not something I am concerned about in the long-run.”
© 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.
October 3, 2012
