Today billionaire Eric Sprott told King World News that central banks are panicking as the whole world is buying gold here, including Druckenmiller.
Eric King: “King World News was the first news organization in the world to report that multi-billionaire Stanley Druckenmiller had bought back his gold position and today (two days later) Bloomberg news confirmed it. What are your thoughts on Druckenmiller buying back his gold position?”
Eric Sprott: “When Druckenmiller sold his gold, which turned out to be great timing, I never subscribed to the thesis of why he sold it, although it was correct (in terms of timing). I had been wondering lately, is this guy going to come back in here? I was wondering that simply because of all the uncertainty with U.S. politics and what’s going on in Europe, Japan and China With that as the backdrop you would think he would want to own gold. So I was quite pleased to see him stepping back in and I think it’s a leading indicator of how other mainstream people are thinking.”
Eric King: “Where do you see ahead for the gold and silver markets in 2017?”
Eric Sprott: “You can see all sorts of interest in both the stocks and the gold ETFs and I think the more important thing to move the mining stocks is the ETFs, right? The ETFs have to come first. I guess the most pleasant thing is to see the type of tonnage that is going into the U.S. ETFs. Because the European gold ETFs were already on a huge roll in December and January. So now we’ve got the U.S. gold ETFs finally starting to pick up some steam…
Continue reading the Eric Sprott interview below…
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Eric Sprott continues: “I can tell you that the thing I’m watching the most is the Chinese gold ETF, which, just yesterday, had $28 million more in inflows that resulted in them buying close to a tonne of gold to add to their growing hoard. That ETF only has a value of about $1.1 billion, so that was almost a 3.3 percent increase in their gold holdings in just one day.
I suspect that the Chinese, who tend to act in unison, are going to be coming into the gold market big time here, so I’m watching that Chinese gold ETF. If the Chinese keep coming in and buying gold at this rate it’s over because you already have everybody across the globe buying gold. And of course it’s the investors that can really push the price of gold higher. As an example, when the World Gold Council put out their data, it really was the investors that were the huge buyers of gold last year, not so much the jewelry consumers. So investors make the difference in the gold price. If we start getting 10 tonnes a day into these gold ETFs, that’s about 2,500 tonnes a year. That’s about all the entire world mines. The West can’t dishoard 10 tonnes a day, believe me, and it’s been going at that kind of rate lately.”
Eric King: “Your business partner, John Embry, was mentioning in his KWN interview that one of these days the Western central banks are going to lose control of the gold market. Is this ETF situation going to at least force them to retreat in terms of letting the gold price rise?”
Eric Sprott: “There’s no doubt about it if they (investors) keep coming in and buying that kind of tonnage. At some point they will look inside at what little gold is left in the Western vaults and say, ‘No mas. We can’t keep doing this at the rate that they are buying tonnage because we will run out of gold.’ And if they see that they are going to run out of gold in a year or so, when do they raise the white flag? I have told you many times that the Western central banks have been making up for the imbalance in term of supply and demand by dishoarding their gold hoard surreptitiously.
But if this time we go into 2017 and we have that kind of gold ETF buying around the world, then the West will not be able to mobilize the kind of gold tonnage that would be necessary to make up for the shortfall. So I suspect that the price of gold will break loose to the upside because the undertone of the gold market and particularly the way the stocks are acting is incredible. The interest has just exploded here. I would say this is a pretty serendipitous situation we all find ourselves in.
Eric King: “Is that why the West went and bullied India into declaring a war on cash in yet another desperate attempt to stop the flow of gold into India because Western central bank vaults are reaching the point where they simply can’t supply the gold?”
Western Central Banks Panicking As…
Eric Sprott: “I’ve always had that in the back of my mind, Eric. Because every time the price of gold wants to explode, India and their central bank suddenly try to do something about it. They did it in 2011 with all those export measures. They had about 20 different rules they imposed that took the Indian gold consumption from 130 tonnes in May of 2011, all the way down to 7 tonnes in November of 2011. And had it stayed at 100 tonnes, the gold price never would have done what it did.
So it could very well be that the Indians were persuaded by the Western central banks to do something draconian like that. Eric, what they have done is totally draconian and it can’t be good for anybody. It was preposterous that they took the 5,000 rupee notes out and replaced them with 2,000 rupee notes and then of course the 2,000 rupee notes aren’t available. (Laughter). All they did was hurt their economy, and in the long-run it’s going to make people want to own gold rather than paper, which can become worthless overnight. Regardless, I think the Indians will be coming back into the gold market in a big way. Whether we see it in the official data or whether we have to see how much gold is being smuggled into India is a different story. But I think that India is going to join the fray here.
…The Whole World Is Buying Gold
Anybody looking at the gold market can see that the whole world is buying gold here. We have a new bull market in gold stocks. I think they are already up something like 33 percent, which would be a great year in and of itself and yet we are only just beginning the second month of the year, and I think there are still a lot more gains coming in the year ahead.”
***JUST RELEASED: ALERT: Special Release (War In The Gold Market) From Billionaire Eric Sprott’s Company CLICK HERE.
***KWN has also just released the powerful audio interview with top trends forecaster in the world Gerald Celente and you can listen to it by CLICK HERE OR ON THE IMAGE BELOW.
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