Today one of the top people in Hong Kong spoke with King World News regarding shocking facts about today’s smash in gold and silver.  Hedge fund manager William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also discussed the physical markets for both gold and silver, and said that silver will be the one to watch in the future.

Kaye:  “Right now we are at extremely oversold levels.  As we speak, Eric, spot gold is once again in backwardation.  This is something that you see in precious metals when there is clear evidence of manipulation.  We saw 30 tons of gold sold at 2 PM Hong Kong time.  That is a time in which no one does any real trading.  What Asian trading is going to take place is already done by that time of the day….

Continue reading the William Kaye interview below…


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“At that time of day people are simply waiting to hand things over to London in a few hours.  

Regardless, an awful lot of paper gold was intentionally dumped in a pre-programmed algorithm.  This was most likely done by the Bank for International Settlements.  This was designed to condition the paper market by forcing the price lower.  It was also designed to set the market up in London to open up at lower levels.

Gold is in backwardation, but in terms of percentages silver is in even more backwardation than gold.  This is typical of what you see when there is overt manipulation.  And when you get the cost of suppression well below equilibrium levels, you get a situation where  physical metal is in short supply.

And because there is an actual squeeze on the physical market as deliveries have to be made here in Asia, particularly at these artificially low prices, spot physical goes to a real premium.  In contrast, the paper gold contract goes to a discount.  This is something we have been looking for in terms of calling the beginning of the end of this brutal bear market and I just don’t think it’s sustainable to the downside for that much longer.

It certainly feels like there could be more downside, despite the physical tightness in the market, because the powers that be have been very efficient in terms of getting the additional supply needed to the market from wherever their sources are.  In addition to leased gold from Western central bank vaults, gold is accessed either directly or indirectly by the Bank of England and sent where it is needed, which is mainly out here in Asia.

So as long as the West can keep doing that by accessing central bank gold and other sources such as the ETF GLD, which was tapped pretty well in October and is being tapped once again as a source of gold, this process could theoretically continue.  This will end and the gold market will have a violent rally when the authorities who are behind this are no longer able to access those sources of physical supply or the physical market simply becomes too tight.  Whenever they achieve their downside price target that will end this pain as well.”

Eric King:  “Why are the central planners so hellbent on achieving a particular downside target?”

Kaye:  “Some people you have interviewed on KWN have said that this is part of a PSYOP (Psychological operation) or even psychological warfare.  The authorities would like to see strong equities and a strong U.S. dollar for now.  So they want to see gold and silver lower to essentially scare people out of that asset class.  There are very few investors who have the guts to commit capital to what appears to be a falling knife because very few people want to risk getting cut up.

Gold is also still widely considered to be the anchor to the financial system.  Because of the importance of gold in the global financial hierarchy, getting gold unduly low in terms of price creates an artificially low cost of capital.  A rising gold price is a sign of real dangers in the financial system and also creates a high cost of capital.

The artificial suppression of gold does the opposite and sets the stage for the bubbles in other asset classes we are seeing, particularly in equities, bonds, and currencies.  So we are witnessing the final stages of a huge tailwind behind equities, bonds, and the U.S. dollar.  This is directly related to the extremely depressed price of gold, which is why the powers that be have been so hellbent on achieving this suppression.”

Kaye added:  “Investors should count their wealth in terms of ounces of gold ahead of what will be a historic repricing of gold to the upside.  Also keep your gold outside of the banking system and continue to add on what is unsustainable weakness.  Before this is over I can promise you that the people who own gold will have the last laugh.  I should also add that even though we don’t own silver, this metal is incredibly attractive at current levels.  In fact, I would have to argue that silver looks even more attractive than gold at this point.”

IMPORTANT – KWN will be releasing interviews all day today.

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Eric King
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