Kaye:  “The selling action on Friday was pretty well-foreshadowed.  Virtually every Non-Farm Payroll report, irrespective of the number, we’ve seen the same type of downside action.  The number, which is made up anyway, is always gamed.

There is clearly no evidence of a recovery, but as I said they gamed it anyway.  Once the physical market in London had been settled, the COMEX market was jammed lower and it has continued to be leaned on.  One thing that needs to be understood is that right now in Asia time we are dealing with something that is a little bit unusual....

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“Normally during Asian trading the paper price of gold is allowed to rise.  There is a connection, even though it is a loose connection, between the premiums which can’t be off the page without things looking silly.

These guys take their foot off the brake in Asian trading and the paper price of gold is allowed to rise somewhat so that the cartel can get premiums on the gold they loot during US and London trading.  But that’s not necessarily going to happen this week because China is closed.

This is a big holiday in China and it’s an important holiday to the mainland Chinese.  So the Shanghai market will be closed through Wednesday.  This means there is real potential for mischief in the early part of this week.  After that I think normality will return and gold will be reset higher.”

Eric King:  “Bill, I get the feeling from you very recently that we are at or near the bottom in gold here and that we are going to enter a new leg higher in this gold bull market.”

Kaye:  “Your read would be right about that, Eric.  I think we’ve double-bottomed.  We touched the $1,330 to $1,340 area now a couple of different times.  So I believe we have bottomed.

For people who are looking to ease their way into a position or build further upon an existing position, I see today’s prices being an advantageous entry point.  On the other hand, it is possible that we retest once again and put in what we call a ‘diamond’ bottom if we do get back to that $1,330 to $1,350 area.

But I believe that will hold and the reason for this has to do with fundamentals, not technicals.  We are fundamental investors and we look at charts only because other people look at them.  And we use charts solely for our trading strategies, not for our fundamental investing strategies.

From an investment standpoint, we strongly believe that today’s gold prices are extremely attractive.  We also believe that gold prices will be higher in the next 60 to 90 days, and in all likelihood they will be significantly higher than they are today.”

Kaye also added:  “We are very confident of our understanding of this setup.  I believe we have benefitted from operating out of Hong Kong.  I’ve been investing and traveling in China for a long period of time, and that’s the epicenter of where demand for physical gold is coming from.

I think we have benefitted from being very well placed, in fact a much better place than many of my peers, in understanding what is really happening and just seeing this enormous migration of physical gold from the West to the East.  And the migration of gold has been important throughout history.

I realize that this particular saga today is being largely manipulated, and that’s why this transition of physical gold from West to East is occurring at such a rapid pace.  But if you look at history, gold has been an anchor in people’s monetary affairs for over 2,000 years.

What we are going through now is a fiat currency architecture that’s really on the precipice of self-destructing.  What we are going through now is an anomaly.  Paper currencies throughout history have never worked.  It’s always ended badly.  They’ve always collapsed under their own weight because governments have always abused them.

This currency collapse is going to happen again in our view.  So people need to be prepared for this.  Some portion of people’s assets needs to be in precious metals.  If you study history, and we have done this extensively, the way you could identify countries that were in secular decline is they were losing their gold.

The way you could identify countries that were ascending or on the cusp of taking global leadership in economic affairs, they could always be identified by gold migrating to their coffers.  That’s exactly what’s going on today.  China is in ascendancy, the United Sates and the West are in decline, and the gold is migrating to the East, which is where we are located.”

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Eric King

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