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John Hathaway continues:
“So I wouldn’t be surprised if we just track sideways here for a while. But that’s a very short-term view. I think we are heading into a recession. With what is going on in Europe and China, I think earnings for the S&P stocks are going to be very disappointing.
I could see some problems developing in the equity markets as a result of that....
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“That could lead to a new round of concern over what to do from a policy perspective. Clearly we have quantitative easing or some variation of that becoming routine here.
What gold hasn’t discounted is how this all plays out. How does this play out in terms of public policy, equity markets, interest rates and that kind of thing? I don’t think anybody knows the answer to that. So I think that’s where the next surprises lie.
But I don’t think the election solves anything. I’m watching for a knee-jerk reaction in gold if Romney starts to do well. Medium-term, once we take out $1,900, and start trading above $1,900 for any period of time, then I think the shorts are really going to have to be concerned.
Of course there will be these attacks on all of these price points, just like there was an attack on $1,800. But once we break decisively through $1,900, then I think we will see gold not just creeping higher, gold will go up quite dramatically, several hundred dollars. It will also stay elevated after that breakout.
At that point the mining stocks will really catch fire because they are all pricing in $1,200 gold. If $1,200 gold looks like it’s never going to happen, then there is going to be a lot of catch-up for the mining shares.”
Hathaway also added: “Most people have missed this move in gold, but I can tell you that I see a lot of people looking at it and asking, ‘Shouldn’t we be there?’ There are more and more mainstream people looking at gold. My guess is they will act on it.
Once gold starts taking out $1,900 and resuming some fireworks, silver won’t be far behind. Silver has that speculative aspect to it that attracts hot money. Silver will be on the move as gold takes out new highs, and the same is true for silver stocks.
Most of the conversations I have with potential investors, it’s really about gold. Silver generally comes up as an afterthought. Silver has already revisited the highs from earlier this year, but it just has to do more backing and filling. Ultimately, when gold goes to new highs, I believe silver, like gold stocks, has a lot of catching up to do. So silver may surprise some people.
I would add that the fact that the mining shares are outperforming just confirms that this is the start of the next bullish advance in this 13-year bull market in the metals. Most people, I’m happy to say, are not aboard, because that means they are the ones who are going to provide the octane for more upside.”
© 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, Nigel Farage, Ben Davies, Dr. Keith Barron, Jean-Marie Eveillard, Bill Fleckenstein, and Egon von Greyerz are available now. Also, be sure to listen to last week’s line-up of other KWN interviews which included and Felix Zulauf, Rob Arnott, Michael Pento, and Gerald Celente, by CLICKING HERE.
Eric King
Hathaway - Gold Shorts To Panic As This Key Level is Breached
Today John Hathaway spoke with King World News about a key level in the gold market that will cause panic among the shorts when it is breached. The four decade veteran and prolific manager of the Tocqueville Gold Fund also believes that gold will surge, “... quite dramatically, several hundred dollars.” He believes this will take place after the key level is taken out on gold.
Hathaway went on to cover silver, but first, here is what he had to say about what is taking place in the gold market: “It seems to me we are ready to go into a back and fill mode (on gold) because people are going to start looking at the election in the US, and that’s probably an excuse not to do too much. One thing that had concerned me, at least in terms of a short-term trading perspective, was a Republican win which would make people think, incorrectly, that all of our problems were over.”
© 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.
September 25, 2012
