Eric King:  “Andrew, I’m going to quote you here, ‘If gold were to trade into the low $1,300s, it would be unsustainable for very long.’  That turned out to to be exactly what we saw (in the gold market).  Gold drifted into the low $1,300s, it turned around and we haven’t seen that again.”

Maguire:  “The reason I was able to make that call is because I saw the huge amount of actual physical (buying) coming through for allocation.  Obviously that flies under the radar for paper-centric traders....

Continue reading the Andrew Maguire interview below...


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“But having seen this vast amount of physical being sought, you realize that it’s physical, one to one.  It’s not leveraged.  Whereas you are essentially trading against an unlimited synthetic supply of paper gold (in the paper market).

There is a lagging period where you’ve got these vast quantities of fresh leveraged supply coming in versus this unleveraged physical demand.  Leverage works in two ways.  It also works against the sellers.  I think you saw that last Wednesday with what I believe looked like a bottom. 

The key thing is the physical wholesale markets, and I’m seeing the same thing now.  I’m not seeing any letup in physical demand.  The central banks, the sovereigns, they were buying at $1,800, $1,700, $1,600.  But when you take a dip to this kind of level where we actually start to approach break-even cost of mining (gold), well, obviously that was an act of desperation (on the part of central planners). 

As Russia, or China, why not just pick it (gold) up and ship it over?  It’s quicker (than mining it).  So you’ve reached a point where the lines cross, and the physical market diverges.  I have checked the numbers now and we are very close to 1,000 tons of deliveries just this year into Shanghai. 

That does not account for the 25 tons we are seeing every day through London.  And that does not account for what is being directly purchased through producers.  So there comes a point where you get such a discount that this demand increases exponentially.  And we are not just seeing the central banks and the sovereigns coming in,  we are also seeing some very smart money, I’m talking investment money, coming in (to the gold market as well).

So for them (the central planners) to try to continue to take this (market) down, I think the lines have crossed to the point where they are not going to be able to actually suck out enough paper discount to offset what they are losing in physical.”

IMPORTANT - Andrew Maguire has an absolutely incredible trading service.  For those who would like to get more information and sign up you can do so by CLICKING HERE.

IMPORTANT - Part II of Andrew Maguire’s written interview has also now been released on KWN.

This is part I of a two part written interview series and it is only a small portion of what Maguire had to say in his extraordinary audio interview.  The KWN audio interview with Andrew Maguire 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 audio interviews with Gerald Celente, Andrew Maguire, William Kaye, Rick Rule, Nigel Farage, Dr. Paul Craig Roberts, John Embry, Art Cashin, John Mauldin and Egon von Greyerz are available now.  Also, be sure to hear the other recent KWN interviews which include Eric Sprott, Marc Faber and Felix Zulauf by CLICKING HERE.

Eric King

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