Eric King:  “The volatility in gold that you expect to see, Jim, can you talk about that?

Jim Sinclair:  “I believe you will see a $1,000 day (in gold), and I think you will see it on at least three occasions.  It’s not unimaginable if you go back to the market of the 1970s ... And it will happen because kicking and screaming, gold is going to drag the US into a position of a balanced balance sheet, or near-balanced balance sheet, if you assume that the gold the US claims to have in fact they do have, and the world will assume that....

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“I firmly believe gold is going up into the $3,500 range and higher.  Gold is attached to debt.  A fiat currency has, on the other side of its ledger, debt.  The fundamental occurrences that have taken place over the last few months are not that positive to the dollar.  And today’s (jobs) report will be analyzed very carefully, already showing some significant lack of foundation in the amount of people out of the job market.

So, this time I strongly believe that the dollar will not get much higher than it already has.  (The Dollar Index) will return back into the 70s as gold begins to move toward the $3,500 level, which I believe will take place from the low we have already established.”

Eric King:  “Jim, you’ve published some of the works of one of the individuals talking about a Wave III going forward (for gold), up to $4,500.  That’s obviously a very violent move.  If we repeated what we saw in the 1970s for gold in terms of performance we would have gold go from $250 to $6,250.  My question for you is, this next leg, this advance in gold, how will that trade?  Because it sounds very violent to the upside.”

Sinclair:  “That’s exactly what will happen.  In the beginning you climb the ‘Wall of Worry.’  You repair the technical damage.  All of that (occurs) after the market has found a low due to physical demand by central banks.

As we go forward and the expectations of general investors are not going to be met by the reality of economic activity, then you begin to get some short covering (in gold), which creates your most volatile upside moves.  I think that the number of $4,000 to $4,400 is the reality of where this market is going to move off of this low, through the continual adventures of the soap opera called the gold price.”

Eric King:  “Jim, you talk about that short covering -- will that be part of the violence of Wave III?”

Sinclair:  “I think that’s the way we are going to move from $3,500 up into the $4,000 range.  I (then) think that you will have your Western central banks actually oppose the Eastern central banks in the sense that the speculation in the paper markets, if they still exist to any significant degree, would be utilized to try to cause just what we’ve gone through now (a reaction), all in an effort to protect the dollar.

I don’t believe that gold will have the fall that it had in the 1980s.  I firmly believe that gold is moving into a greater monetary position.  It’s not moving away from money, it’s moving towards money.  I believe that gold will be the necklace that currencies will wear.”

IMPORTANT - This is Part I of a two part KWN written interview series with Sinclair.  The above portion was just a small portion of the incredible audio interview with the legendary trader.  The audio interview is available now and you can listen to it by CLICKING HERE.

© 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 interviews with James Turk, Jim Sinclair, John Embry, Gerald Celente, Dr. Stephen Leeb, Rick Rule, Ben Davies, Andrew Maguire and Marc Faber are available now.  Also, be sure to listen to the other recent KWN interviews which included Egon von Greyerz, Felix Zulauf, Eric Sprott and Art Cashin by CLICKING HERE.

Eric King

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