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Caesar - Watch Gold as Europe Headed Into Crisis Again

With gold trading just below $1,700 and silver above $32.50, today King World News interviewed 25 year veteran Caesar Bryan. Gabelli & Company has over $31 billion under management and Caesar Bryan has managed the gold fund since its inception in 1994. Caesar told KWN that Greek bonds are now trading at 19% and Europe is headed for trouble once again. Caesar also discussed gold and silver, but first, here is what he said about Europe: “On the surface things may appear to be calm, but I don’t think the European crisis is anywhere near its conclusion. Losses still have to be taken from Ireland, Spain, Portugal and possibly even Italy. This morning it was reported the Greek 10-year bond was yielding 19%. So there will be yet another Greek bailout required.”

Caesar Bryan continues:

“There are various mechanisms for sorting out the European crisis. One is hard money, through the EFSF and the ESM. Right now they are debating about how much to put up for that. Remember, they have agreed on a July birth of the ESM, the European Stability Mechanism, with 500 billion euros of funding.

The temporary facility would then drop out....

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“So there are negotiations going on around that and we will have to wait and see what transpires. But the ECB has already committed 1 trillion euros through the the LTRO. I believe the ECB is going to be very active going forward because, as one commentator put it, ‘Monetization works, and it sells well.’

There are a number of ways out of Europe’s problems. One of them is higher inflation. Another is to take a haircut. The creditors in the North are going to have to realize more losses. I tend to believe those losses will be in the form of inflation. That’s what we are going to see.

So what’s going on in Europe is going to be very positive for gold. This is because the central bank will be under pressure to print. It is much easier for politicians to sell the voters of Northern Europe on an insidious money printing from the central bank.

On the US side, I believe the Fed will act. Leverage remains really high as debt to GDP is still 250%. In a highly indebted situation, the Fed is going to have its foot on the accelerator, not the brake.

As far as how this is impacting the price of gold, it broke above the 200 day moving average yesterday, so that’s somewhat encouraging. This move in gold has taken place while demand from India has been very muted because of the doubling of the import tax. So gold is looking fine here.

The key factor going forward is going to be all of the money printing in Europe and the United States. This continues to put a solid floor underneath the gold price, while the longs wait patiently for a significant breakout to the upside.”

When asked about silver specifically, Caesar stated, “Silver trading above $30 is a very nice price for the silver producers. I expect silver to perform well as gold moves higher. Currently, the 200 day moving average on silver is at $34.50, so we are less than $2 from moving above that level.

We are also very close to the 150 day moving average which is at $33.16. So silver is hanging in there just fine and looks poised for a move to the upside along with gold.”

To learn more about Caesar Bryan, his management services and the Gabelli Gold Fund CLICK HERE.

Eric King

KingWorldNews.com

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