Norcini has been stunningly accurate in his predictions of the movement in the gold and silver markets.  Now the acclaimed trader discusses these incredibly important developments in key markets:  “You cannot create the kind of money the world is printing and not have any repercussions, no impact, no consequences whatsoever.  It simply defies everything we have ever learned about economics.

The mindset in the West is that there is no inflation regardless of what the central banks are doing with the money creation.  Today lumber futures made a 7 month low.  That collapse in price is startling considering the US is supposed to be on the mend with regards to housing.

But as a result of slumping commodity prices such as lumber, demand for paper gold has been falling....

Continue reading the Dan Norcini interview below...  


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“This is why we have recently seen continued pressure in both the paper gold and silver space.  The COMEX market is being sold off in spite of the massive physical demand for gold and silver because Western hedge fund managers and institutional managers aren’t going to buy gold.  In fact, some of them have even  been shorting paper gold.

The Fed and the Bank of Japan have given the illusion that it is a no-risk bet to be long common stocks.  Nobody is asking about valuations, overbought conditions, excessive leverage or margin debt.  They don’t care.   All they know is they can’t get yield anywhere else and so they are going to chase common stocks higher.

So the money has been flowing out of the paper gold and silver markets.  It could be that at some point we start to see the inflationary fallout from this excessive money creation.  But when sentiment changes it will change quite rapidly.  When the concern shifts to inflation, this is when gold and silver will have forged a bottom and begun to make their next move higher.

Right now gold and silver have recently just continued breaking support levels.  But it is still the same story since the bull market began in 2001:  It’s the demand for the physical gold and silver that actually bottoms the paper market.  We got a taste of that when gold dropped to $1,320.  We saw how ferocious the demand was for the physical and how aggressively gold rallied off of those lows.

What we are watching for now is when we are going to see another huge influx of physical buying as the paper gold and silver prices have recently weakened.”

Norcini also added:  “The other thing to watch closely here is the US dollar.  When the Japanese yen first broke through par with the US dollar, it took place in the middle of the afternoon.  When the yen plunged, what happened was the entire foreign exchange markets were thrown into a convulsion.

All of the major currencies began to move sharply lower against the US dollar.  We saw huge selloffs in the euro, British pound, Swiss franc, and the yen.  We even saw this event impact the commodity sector with the Canadian and Australian dollars getting sold down.

As the dollar broke above resistance and began to accelerate its gains, that’s when gold began to come under more serious pressure, and the same was true for silver.   At that point the hedge fund algorithms began to indiscriminately sell all commodities as the dollar strengthened.  All of this has led to weakness in paper gold and silver because it’s a US dollar game and it’s an equity game.

The bottom line here is that gold and silver are in secular bull markets and nobody is going to ring a bell when it is time for the metals to reassert themselves by putting an end to this bear phase.  Long-term holders of physical gold and silver are simply being forced to exercise patience in this environment. 

It’s obvious that a great many people all over the world have been adding to their physical gold and silver positions or taking positions for the first time.  This really is an incredible battle that is taking place right now between the physical market and the paper market in both gold and silver.  But until the physical market overruns the paper market, in the very short-run gold and silver may remain under some pressure.”

© 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 William Kaye, James Turk, Andrew Maguire, John Hathaway, John Embry, Dr. Paul Craig Roberts, Jean-Marie Eveillard, Eric Sprott, and Nigel Farage are available now.  Also, be sure to hear the other recent KWN interviews which include Art Cashin, Marc Faber and Felix Zulauf by CLICKING HERE.

Eric King

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rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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