Today one of the top hedge fund managers in Hong Kong told King World News that the insatiable demand for physical gold and silver has the shorts worried at this point.  Hedge fund manager William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also discussed where the physical demand is coming from and what this means for the future.  Below is what Kaye had to say in this extraordinary interview.

Kaye:  “What we’ve seen is an effort to suppress the price of gold in what is the biggest rollover month.  We just had the expiration last week of both December futures and options.  This is rare when options and futures expire at the same time.  It also happens to be the largest delivery month of the year.  

So it would make sense to suppress the price the way they did in order to minimize the offtake of physical gold, which as we’ve discussed is very tight in the system.  That is my take on what we saw last week, particularly with the takedown on Friday.  We’ve had a bit of a recovery since then, which is not surprising.  Every time the paper gold price is taken below $1,200, the revival in physical demand forces a return to the $1,200+ level….

Continue reading the William Kaye interview below…


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Eric King:  “What’s happening in the physical market in Asia, London, etc?”

Kaye:  “It’s extremely strong.  The reports we get not only from Shanghai but also the LBMA are that physical demand, particularly in size, is very strong, especially below the $1,200 area.”

Eric King:  “Stephen Leeb spoke with KWN about a mystery buyer who came into the gold market after the vote in Switzerland who literally bought every ounce of gold that was offered.  Leeb believes that buyer was China.”

Kaye:  “China is a major buyer and they have multiple ports of entry.  There is too much of a focus of gold being imported into China from Hong Kong because it comes in through several places, including Shanghai, but from other places as well.  So there are multiple points of entry into China, both officially and for the household sector.

The underlying demand in China, India, Russia, etc, continues to be very, very strong.  We are talking about the sovereign demand as well as the persistent household demand.  It’s incredibly robust and as long as gold continues to trade at these very attractive levels we think that demand will continue.

The bottom line here is that gold and silver are one of the few asset classes that have a long history of maintaining their purchasing power.  And people in the East understand this and so they are taking advantage of the fire sale prices in both of these metals.  But we are convinced that anyone following this investment strategy will be very well-rewarded in the future.  In the meantime the physical demand remains insatiable and this is what has the shorts so concerned at this point.”

IMPORTANT – KWN has many more interviews being released today.

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The audio interviews with Rick Rule, Bill Fleckenstein, Ben Davies, Greyerz-Turk-Stamm, Gerald Celente, David Stockman, William Kaye, Dr. Paul Craig Roberts, Andrew Maguire, Eric Sprott, Rick Santelli, Michael Pento, John Mauldin and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf — to listen CLICK HERE.

Eric King