Today the man who made one of the greatest market calls in history spoke with King World News about the historic events taking place in the gold and silver markets as well as what to expect in the future. He also discussed the Bank for International Settlements involvement and why we are seeing such great volatility in gold.
Davies: “Outside of gold and silver, I don’t know any market in the world where your downside is probably 10 percent. This is unequivocally the time to be buying gold and silver….
Continue reading the Ben Davies interview below…
“A lot of people are talking about the gold market plunging to $800 or $900. My personal opinion is that the abject misery and sentiment is so poor in the market right now that I believe we’ve already put in a bottom. And as a firm we’ve started to position ourselves for the medium-to-long-term.
I think a lot of the recent volatility is surrounding the upcoming Swiss referendum. If I was the Swiss National Bank or the Western central planners and I wanted to create some uncertainty in the minds of the Swiss voters, volatility in the gold market would certainly aid in that cause.
I think the political system and the corporates have no interest in a stronger Swiss franc, which is what would be invoked if the referendum were to pass. Should that referendum be ratified, the artificial Euro-Swiss peg would come under such enormous pressure that it would break. This would be as a result of the 20 percent gold backing of the Swiss franc.
So if central planners want to create some instability in the minds of people, what better way than to push down the price of the Comex gold futures. Then they can essentially say to the Swiss people, ‘Do you really want to be holding an asset that can drop 5 or 10 percent over a one-month period? No, I didn’t think so.’
I think what is actually happening is that the BIS (Bank for International Settlements) has set up a swap arrangement so that should the actual day come where there was a ‘Yes’ outcome, the Swiss will already have a significant amount of metal that they can take in. This is part of the reason why lease rates have gone negative.
So in some ways it’s not surprising that the market was pushed lower. But gold immediately found some serious demand out of the usual suspects in Asia, primarily India and China. And so the market quickly rebounded back up near the $1,200 area. So it’s been difficult for them to hold the market down, and obviously with the lease rates going negative, that’s put a bid into the market.
But should a ‘No’ vote result, it’s quite possible that we will get another chance to buy this market at lower prices. However, as I said, the sentiment is so awful and everyone keeps projecting lower and lower prices, so this is not the time to get cute. Investors need to be completely accumulating if not all, at least 50 percent of any holdings in gold that you want to acquire. As I said at the start, it’s the only asset class in the world where the risk of a 10 percent loss is probably all you can see, and at the same time the upside is staggering.” KWN will have a more in depth interview on the gold and silver markets with Ben Davies this Friday.
IMPORTANT – KWN has many more interviews being released today.
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