Eric King:  “John, we have this smash continuing in gold and silver, your thoughts here?” 

Hathaway:  “Right now it’s just piling on by momentum players.  Remember, it’s also the end of the quarter so this is window dressing in reverse.  People want to show big profits in short positions.

All along this has just been naked shorting by the usual suspects -- trading desks, the big banks, and hedge funds.  There is very little physical gold that’s being sold.  The mechanics (of shorting) are basically you post margin, and you short X amount of gold....

Continue reading the John Hathaway interview below...


To hear which company legendary Keith Barron founded, personally

invested millions into, and is poised to become

a uranium superpower click on the logo:

“Some of these (down) days you have seen volume that equals more than the annual mine production of the global (gold mining) industry.  That’s ridiculous to think that much gold could be acquired, positioned, and then shorted in such a short space of time.

It (the manipulation) is being done by the same guys who were messing around with LIBOR and are now being prosecuted.  There are allegations they are doing the same thing in FX (currency trading).  You know gold is a big, liquid market, so the capacity for a lot of players get into it and exploit technical weakness, which is what they are doing, is great.  So that’s what appeals to these same people.

You couldn’t do it in hogs, pork bellies, tin, or anything like that.  So the blessing and curse of gold is that it’s a big, liquid market.  Now these short-sellers have the upper hand, but the good news is they are at record short levels and very vulnerable to a violent short squeeze (chart included below).

We know that the physical markets are a complete disconnect with the paper market for gold.  The demand in Asia, as evidenced by the premiums for physical gold, are at record levels.  There is a shortage in the physical markets and the paper markets are very short.

The (gold) market short position is greater than it was at the bottom in 2008.  So I would just expect a violent recoil in this extremely oversold market.  I wish I knew when, but I kind of think it’s being exaggerated here at the end of the quarter.”

Eric King:  “John, we have (a remarkable) 67% less bulls on silver than we did at the peak in 2011, and 60% less bulls on gold.  Sentiment is much worse than it was at the bottom in 2008.”

Hathway:  “Oh for sure.  I agree with that.  The difference between now and 2008, is that in 2008 the entire complex of financial markets was getting smashed.  That’s what led to quantitative easing.  Now, gold is kind of singular in its bad performance, so it kind of stands out.  Whereas in 2008, as painful as that was, it didn’t stand out in the same way.

The other thing is the talk of exit from asset buying by the Fed has so terrified the financial markets that it makes me think that in theory they can exit, but in practice it’s impossible.”

John Hathaway wanted to add the following chart from Eric Pomboy.  Pomboy, founder of Meridian Macro Research, said this to KWN regarding the chart below:  “The net commercial short position is at the lowest level since February of 2005, when gold was at $425 an ounce.”

The information above was just a small portion of this powerful interview with John Hathaway.  Hathaway spoke at great length about the incredible smash that has taken place in the gold and silver markets and what to expect going forward.  The timely KWN audio interview with John Hathaway 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.

To learn more about John Hathaway and his management services CLICK HERE.

The audio interviews with John Hathaway, Dr. Paul Craig Roberts, MEP Nigel Farage, Rob Arnott, Egon von Greyerz, Gerald Celente, Dr. Philippa Malmgren, Eric Sprott, Jim Grant and Art Cashin are available now.  Also, be sure to hear the other recent KWN interviews which include Marc Faber and Felix Zulauf by CLICKING HERE.

Eric King

To return to BLOG click 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.

Subscribe to RSS
KWN Blog