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Ben Davies continues:


“Not withstanding that, it still feels quite aggressive.  It’s disappointing for the bullion participants there is no doubt about it.  When a market is giving you the best fundamentals in the world to be invested in, but is consistently showing a poor response to bullish news, you have to take note. 


I believe when I last came on (to KWN) last time we talked about our trend system being ‘trend ready.’  The markets released lower, and now we’re into extremes that I haven’t seen in terms of sentiment since 1993 and 1997....


Continue reading the Ben Davies interview below...




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“To give you an idea, in this bull market, sentiment on about five indices that we look at has never been this low ... People have cited the recent 13F filings where some major holders, Soros, Moore Capital, a notable few, had reduced their portfolio holdings in the (gold) ETF.


In terms of psychology, because the market hadn’t been going anywhere for a while, I think some stale long-term holders definitely picked up the phone and said, ‘Perhaps we are going to liquidate.’  What I find very interesting about that ETF redemption announcement, at the end of the day, the ETF’s just haven’t been the driver of the bullion market over the last 2 or 3 years in any shape or form.


The numbers are irrelevant to the physical buying that we’ve seen in terms of investment and official demand.  There was over 500 tons bought by three or four central banks last year, notably China, Russia, Turkey, the list goes on.”


Davies also added:  “Yields backed up from extremely low levels.  Bear in mind, sovereign bonds replaced gold as the backing in the financial system.  I find it very difficult to listen to institutions who advocate selling gold because rates are going up.


They play the old trick of ‘it’s all about negative real rates, and in this case real rates have gotten a bit stronger so that’s not a positive situation for gold.’  To my mind, the point where long-end rates go up because there is concern about inflationary pressures in the system from all of the money printing, that is an absolute sure sign that you should be going into gold.


Investors and portfolio managers, if it becomes disruptive, will be discarding sovereign debt to go into bullion as a safe haven asset.  I think that all we’ve seen is a little bit of a trade, for want of a better word, that’s managed to trip some long-term holders out of the market which will leave the market much healthier for that rebound.


I don’t know where it’s coming from.  Maybe we’ve already reached the bottom end of the range, and from here we are going to get some V-shaped bottom and bounce back.  But there is no doubt in my mind that monetary policy has shifted very aggressively towards monetizing more of the fiscal deficits. 


That can only mean one thing in the interim and over the long-run, and that is more money in circulation, higher prices, and that is going to mean gold is going higher.”


© 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.


This was a tremendous interview with Davies.  He puts KWN listeners ahead of the curve on what to expect in the gold market going forward, the mining shares, as well as the macro-picture.  The interview with Ben Davies is available now and you can listen to it by CLICKING HERE. 


The interviews with Ben Davies, Andrew Maguire, Marc Faber, James Turk, Bill Fleckenstein, Egon von Greyerz, Felix Zulauf, John Hathaway and Eric Sprott are available now.  Also, be sure to listen to the other recent KWN interviews which included Art Cashin, MEP Nigel Farage, Michael Belkin and Gerald Celente by CLICKING HERE.


Eric King

KingWorldNews.com

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