Kaye:  “This is a convenient time for manipulation because China’s retail market is closed.  In other words, this is the biggest holiday of the year for the Chinese, and this will have a significant impact on wholesale demand in China from high net worth individuals and others.

It’s apparent that the powers that be -- the Fed, the BIS, the major central banks -- are using this opportunity to push the paper price lower....

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Eric King:  “You warned ahead of time, in last week’s KWN audio interview, that we were going to see this smash in gold and silver -- that we were going to test the lows.”

Kaye:  “Yes.  But the difficulty these corrupt forces will ultimately face is when they run out of physical gold that they can get their hands on.  And we’ve discussed where the supply is coming from.

We are estimating that 2,200 tons will be mined this year.  That figure is well below last year’s total mine output.  Based on current numbers, China alone will speak for over 50% of global mine production.  This creates a problem because India also has a robust demand.  Russia does as well, and so do the other emerging markets.

So Western central planners will run into a problem at some stage.  I don’t know how much of the 1,300 tons of gold that mysteriously left the Bank of England is being used to further prosecute this raid on gold, but I would imagine they are getting low in terms of physical at this point.  It’s just not clear to me where else they can go to source physical gold.

All of the anecdotal evidence says that the Fed is virtually out of gold that can be used to suppress the price.  The fact that we have had two major European bullion banks default also suggests that the ECB does not have gold which is in the form of ‘good delivery bars’ that can be easily made available.

So I think we are very close to the end game, but as I predicted the last time we spoke, Eric, I said in my audio interview that there was a very strong chance these people would force gold lower into a retest of the previous lows.  At that point I strongly believe we will have seen the lows, and I think their ability to prosecute the raids will be highly constrained.

When you combine this with extremely robust and sustained demand from China, India and other places, it will soon halt this effort to push the phony paper price lower.  At that point investors will need to go to full allocations in physical metal.

I think people like us, Eric, who are already pretty fully invested in physical gold should just relax.  Understand that what’s going on here is orchestrated and that it can’t be sustained.  KWN readers have to understand that when the US Dollar Index briefly broke below the critical psychological level of 80 on Tuesday, that is precisely when the massive intervention in the gold market began.  But, again, this type of intervention cannot be sustained for very long.

So as long as you’re not invested on leverage, and I’ve never encouraged your readers or listeners to use any leverage in their positioning in gold, you will be fine.  As long as this is money that investors have put aside for long-term investment purposes, which is what I’ve always encouraged, they are going to be well positioned.  The sociopaths that are gaming these markets are rapidly running out of ammunition.  As gold eventually bottoms and finally begins to turn, you are going to see one of the most spectacular rises in the history of any market.”

© 2013 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 audio interviews with Robin Griffiths, Jim Grant, Gerald Celente, William Kaye, Dr. Paul Craig Roberts, Chris Powell, Michael Pento, Eric Sprott, Andrew Maguire, Grant Williams, Bill Fleckenstein and Egon von Greyerz are available now. Also, other recent KWN interviews include Marc Faber and Felix Zulauf to listen CLICKING HERE.

Eric King

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