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“Fleckenstein:  “Obviously the big break a couple of Mondays ago drove prices down below $1,400 very briefly.  What we know is the physical market around the world, where people buy coins and bars, responded to those prices with long lines and larger premiums.

There were spot shortages and things like that.  Most likely central banks that have been on the buy side bought metal.  We won’t know until we see the data, but probably that’s what happened....

Continue reading the Bill Fleckenstein interview below...


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“Most likely what we are seeing is that $1,400 and maybe some level below $1,500 might be the wrong price as physical buying takes up whatever metal is on offer.  This price was created by a lot of paper selling (in the first place).  The paper market can be quite big, right?  So since the paper market is so much bigger than the physical market on any given day, in the short-run the paper market is what matters.

Now we have a position whereby, based on the Commitment of Traders Report, the large specs have the largest short position ever, and the small specs have their largest short position ever.  So we know there is a big short in the paper market, and we know physical demand is quite strong.  That ought to be a recipe for higher prices.  I guess we’ll find out shortly. 

One of the things people have to be careful of is that sometimes the shortages you see in the physical market are a function of the fact that refinery capacity is somewhat constrained.  But in this case what I think is this is the wrong price (for gold).  The under $1,500 price is the wrong price. 

We’ll find out sooner rather than later if that is correct.  Anybody who has paid attention to gold knows that the policies being pursued are all friendly for gold, and people are especially frustrated because none of that has mattered.  That’s just where we are.

I don’t know what’s going to be the spark that precipitates a higher gold price, but I’m pretty sure it’s going to happen and all of the ingredients are in place (for a higher price).”

Eric King:  “Do you think that was the end of this bearish phase we had to go through in gold and silver?”

Fleckenstein:  “Yes, I do.  But I can’t prove it.  We’ll know over the course of the next few weeks.  If that turns out to be a low, it’s going to be a very big low.  In other words, it’s not going to be like in the last couple of years we’ve had some lows, and it seemed like they were OK, and the markets took it out.  I think if the market is higher a month from now, it’s not going back there (to those lows) maybe ever again.”

© 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 above section was just a small portion of what Fleckenstein had to say about gold and silver and what is happening around the world with the economy and other key markets.  He covers a great deal of ground in a short period of time.  The tremendous audio interview with Bill Fleckenstein is available now and you can listen to it by CLICKING HERE. 

The audio interviews with Bill Fleckenstein, Eric Sprott, Egon von Greyerz, Gerald Celente, Andrew Maguire, William Kaye, Rick Rule, Nigel Farage, Dr. Paul Craig Roberts, John Embry and Art Cashin are available now.  Also, be sure to hear the other recent KWN interviews which include John Mauldin, Marc Faber and Felix Zulauf by CLICKING HERE.

Eric King

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