With gold and silver on the move, today one of the wealthiest and most street-smart pros in the business spoke with King World News about a stunning event that has just taken place which he has only seen twice in his lifetime.
Eric King: “Rick, the mining shares have been on a tear. Silver has also been strong and gold has been holding firm. But the mining shares, the XAU and the HUI, have hit new highs recently. There has been relentless buying of the high quality shares. Michael Belkin, who advises some of the top people on the planet, told King World News that there are many professionals buying the mining stocks and they don’t care that they missed the previous run-up because the stock prices and the market caps were too small before this advance and did not meet their mandates. Is that what is happening to some degree here as you are seeing institutional fund flows into the sector and it’s relentless?”
The Mining Shares Are Extremely Well-Bid
Rick Rule: “We certainly are. Two things here, Eric. The old pros like you and me watch a market move as fast as this one has moved and we tell ourselves, ‘We have to be careful.’ But the truth is that the market is extremely well-bid. And number two, the institutional fund flows into the sector are pretty amazing…
Continue reading the Rick Rule interview below…
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Rick Rule continues: “In Canada, in particular, the generalist investors are still underinvested in gold, while gold comprises 8 or 9 percent of the Canadian Index. This means that generalist investors are underinvested in the only sector that’s moving. For them, buying gold is an employment decision. If they underperform the index by too much, they get fired. So they have to buy.
Funds Flowing Into The Gold Sector From All Over The World
But the truth is that right now there are fund flows into the gold sector from around the world. It’s a little bit frustrating for someone like me who is working very hard and who was trying to get these same investors to get into the gold shares 12 months ago when they were cheap. But the reality is that they see themselves as having to own gold and gold shares right now.
I would also point out that the underlying metals seem to be in pretty good shape. The move today by the Bank of England to lower interest rates and increase QE is just adding more bids to an already strongly gold market.
I Have Only Seen This Twice In My Lifetime
Right now we have both gold and the U.S. dollar moving higher together relative to other mediums of exchange. I have only seen this twice before in my lifetime. In both of the previous cases gold and the U.S. dollar moved up simultaneously and than the U.S. dollar rolled over and gold saw continued strength in terms of its price. I hope that past is prologue.”
Eric King: “Rick, we talked about what you were doing with your own money recently, but for investors here, how should they handle this?”
Rick Rule: “Investors who don’t own any gold need to own some physical gold or their physical proxies like the Sprott Physical Gold Trust. The can also buy our Sprott Junior Gold Miners ETF. Of course for people who are willing to work hard and take risks, participating in the junior sector, particularly in private placements with warrants, for those people who are qualified to do that is the best of the best. But there are high risks and a lot of work involved.”
***KWN has now released the extraordinary audio interview with legendary short seller Bill Fleckenstein, where he discusses the short-term and big picture in the gold, silver, mining, and global markets, and you can access it by CLICKING HERE OR ON THE IMAGE BELOW.
***To hear about the gold and silver markets, listen to the jaw-dropping audio interview with Michael Belkin, the man who advises the most prominent sovereign wealth funds, pension funds, hedge funds, and institutional funds in the world discussing the historic run in the gold & silver markets, what to expect next for gold, silver and the shares and much more by CLICKING HERE OR ON THE IMAGE BELOW.
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