With many worried about the action in the gold and silver markets, a legend says violent back and forth in the gold market is a prelude to a massive surge.
“I would point out that, according to one report I saw, Goldman Sachs has changed its viewpoint and is now bullish for the first time in five years. I didn’t see a quote specifically from Jeff Currie, Goldman’s global head of commodities research, who has been a bear for quite some time, so I don’t know just how bullish they are.
I only bring it up because Goldman influences a lot of opinions and, at the margin, a few more bulls in gold would be a pretty big deal. Regardless of whether gold blasts off or we see a few violent surges back and forth first, I feel like we are pretty close to finally getting going to the upside after quite a long wait.” — Bill Fleckenstein
March 28 (King World News) – As Bill Fleckenstein mentioned two days ago, there was a possibility of “a few violent surges back and forth” in the gold market, but we are very close to the next leg higher…
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The Worst Of Times
I know that many may feel like these are the worst of times for investors in the mining sector, but just remember how it felt at the beginning of 2016. Many investors capitulated as sentiment in the mining sector hit rock bottom after a 5-year bear market. The HUI then rallied a jaw-dropping 185%, skyrocketing from the 100 level to 285!
We Are Faced With A Similar Situation
Again we are faced with a similar situation where sentiment is hitting rock bottom in the mining sector. But remember, these are the moments that separate the weak-handed investors from the strong.
Call With A Legend As Brutal Bear Market Ends
I remember calling my good friend and legend in the mining business, Pierre Lassonde, during the carnage in late 2015. He wasn’t panicking — the great ones never do. In fact, during the final 2015 collapse in the mining sector, Lassonde told me he personally bought $10 million worth of mining stocks in just one week.
For Those Worried About The Price Action
Before you do anything else today, for all of you that are worried about the price action in gold, silver and the shares, please read carefully what Lassonde said to me when we spoke at the major bottom at the end of 2015. It is one of the greatest interviews Pierre Lassonde has ever given and I promise it will help everyone from professionals in the financial world, to mining CEOs, as well as investors from the novice level to the super wealthy. Below is what the legend had to say at the dead lows of the brutal bear market at the end of 2015.
Legendary Pierre Lassonde Says The Super Wealthy Now Buying Massive Positions In The Gold Sector
With the price of gold and silver tumbling recently, today legendary Pierre Lassonde told King World News that the super-wealthy are now buying massive positions in the gold sector.
Lassonde is arguably the greatest company builder in the history of the mining sector. He is past president of Newmont Mining, former chairman of the World Gold Council and current chairman of Franco Nevada. Lassonde is one of the wealthiest, most respected individuals in the gold world, and as always King World News would like to thank him for sharing his wisdom with our global readers during this critical period in these markets.
The Reemergence Of The Gold Bull
Eric King: “Pierre, this long, cyclical bear phase inside of the secular bull market in gold has frustrated a lot of bulls. This bear phase has lasted longer than the mid-cycle correction in the 1970s, and we’ve seen some of the greats like Frank Giustra, who believed the bear phase ended some time ago, make significants bets in the sectors. But it’s not really that abnormal for the great ones to aggressively position themselves a bit ahead of the final lows. Your thoughts on where gold is headed from here.”
Pierre Lassonde: “I became more positive in September, and I really believed that we had seen the lows. I did not give more than a 5 percent chance that gold was going to break $1,120 – $1,130, and yet it has.
The absolute evidence of the market is that the U.S. dollar is still ‘King.’ And as long as the U.S. dollar continues its bullish run against all other currencies, gold is going to struggle. So we have to see a turnaround in the entire commodity complex in order to see the dollar finally start to roll over, but that’s not happening yet.
A Turn Will Come For The Gold Bulls
Is that going to happen? Absolutely. The reason for that is because the dollar’s rise is going to reach a point where it creates so much pain for the U.S. economy that the dollar’s run will be forced by the Fed to come to an end. But that’s not today.
So I’m carefully watching key markets such as oil, gold, copper, and the entire commodity complex. And as long dollar continues its bullish run, the gold bulls are fighting a battle they can’t win in the very short-term.
Eric, you have to remember that the 1970s bear market was a very short bear market. It was literally less than two years. It was very abrupt and the gold price dropped 50 percent in a matter of months. So the whole thing was over in less than 24 months. But then gold came back with a vengeance.
So this cyclical bear phase is a very different animal. If you look at copper, for example, let’s not forget that the price was about 62 cents a pound in the late 1980s through the 1990s. When I took over Newmont Mining in 2001, copper was trading at 65 cents a pound, and the price had been there for 15 years. These bearish phases can sometimes last longer than one can remain solvent, so you’ve got to be really careful.
The thing that nobody can perfectly diagnose is how all this money printing by the largest central banks of the world is going to end in terms of producing inflation. Because the Fed has tripled its balance sheet and the Japanese are doing the same thing. If you look around the world at the amount of money that’s been created — the numbers should be reserved for space exploration because it’s in the stratosphere. (Laughter).
Super-Wealthy Accumulating Massive Positions In Mining Companies
But there are some great companies out there that I am buying a bit more of. The valuations are already silly and every time they dip down I buy more. Some of the smartest money — private equity and the super-wealthy — that’s what they are also doing. They are picking the companies that have solid assets and great management, and as the public dumps the shares at ridiculous valuations, they say, ‘Great, give us more shares.’
A very wealthy African family just bought a 10 percent stake in a company, with more to come because the valuations are so absurd. So the super-wealthy are willing to put $20 million – $40 million into some of these high-quality companies (as they patiently anticipate a reemergence of the gold bull). That’s what is happening right now but people are not seeing this on the tape because these massive positions are being accumulated very quietly.” King World News note: Despite the mainstream media’s seemingly endless anti-gold propaganda, I wanted to thank my good friend, Pierre Lassonde, for letting KWN readers around the world know what is really happening behind the scenes in the gold sector. The bottom line is that big money is beginning to aggressively enter the gold market and that is how major bottoms are made.
King World News note today: Well, there you have it from one of the legends in the gold world. That was what Lassonde said at the depths of one of the worst bear markets in history — the HUI Gold Mining Index had collapsed a staggering 84%! I will call Pierre soon to find out once again what is happening behind the scenes in the gold market as we put in another major bottom. Until then, for God’s sake, don’t panic. This is the time to be buying, not selling.
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