Big Money Anticipating Another 1970s Style Gold Mania
Today one of the top CEO’s in the world told King World News that big money investors are positioning themselves ahead of what they believe will be another 1970s style mania in gold. This interview is tremendous, and it will let KWN readers around the world see the gold market through the eyes of one of the greatest and well-respected veterans in the business. Here is what Sean Boyd, CEO of $5 billion Agnico Eagle, had to say: “We believe this is just a correction in gold and that it was orchestrated in the paper market. The flip side has been incredibly strong physical demand and continued central bank buying. We see this as a tremendous opportunity.
Sean Boyd continues: “Gold equities are at historic lows and the companies are working on their business models and putting together plans that will allow them to weather this volatility and be in a position to participate when gold moves higher. We firmly believe this is just a short-term blip, and gold will go right back to the $1,800 level.
Boyd also added: “If
you look at the sources of demand, India is very strong even though
their government doesn’t want their people to buy and import gold. But
the Indians are still buying at near record numbers. China has been
strong and will continue to be strong, and central bank demand will
continue to be there as well.
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Today one of the top CEO’s in the world told King World News that big money investors are positioning themselves ahead of what they believe will be another 1970s style mania in gold. This interview is tremendous, and it will let KWN readers around the world see the gold market through the eyes of one of the greatest and well-respected veterans in the business. Here is what Sean Boyd, CEO of $5 billion Agnico Eagle, had to say: “We believe this is just a correction in gold and that it was orchestrated in the paper market. The flip side has been incredibly strong physical demand and continued central bank buying. We see this as a tremendous opportunity.
Sean Boyd continues: “Gold equities are at historic lows and the companies are working on their business models and putting together plans that will allow them to weather this volatility and be in a position to participate when gold moves higher. We firmly believe this is just a short-term blip, and gold will go right back to the $1,800 level.
“This rise could take
some time, perhaps as much as the next twelve months. We look at this
in terms of what happened in April. It was a well-orchestrated trade
(manipulation) that was extremely profitable for the shorts.
But
when we look at the physical market, we still see people wanting and
needing to own gold, and those people are taking advantage of this
opportunity to accumulate and build positions at prices they did not
think they would be able to do it at.
Over
the short-term there may be some continued volatility here, and I
wouldn’t be surprised to see hedge funds still trying to attack the
price creating moments of weakness in gold, but we firmly believe the
market is going to be constructive going forward. Nothing has been
fixed. If you actually look the analysis that’s being done by a lot of
the major banks stating that gold’s days are over, basically what they
have put forward is a Goldilocks scenario.
And
when you actually press them on it they say, ‘Well, yes, my assumption
doesn’t include any currency wars, and it assumes that economies are
going to continue to move forward and grow at a pace they haven’t grown
at in years.’ And we just think that Goldilocks scenario makes
absolutely no sense, and that there will be serious issues in the debt
market in the future.
There
will also be continued uncertainty, and ultimately there will be
inflation. So you need to own gold. The people we talk to are looking
at this as an opportunity to position themselves in quality gold
companies and bullion. We also believe that’s what people should be
looking to do now.”
Eric King: “Sean, we have
been seeing gold and silver mine closures with prices at these
manipulated and highly discounted levels.”
Boyd: “The
industry was going through a process of evolving and changing its
business model. The industry was moving out of a growth phase where it
had been building a lot of mines. But what we saw last year was a lot
of big projects that were put on the back-burner.
What
you will see over over coming months, and what you’ve started to see in
the last week or two, is companies announcing they are not going to
proceed with expansion because they are looking to preserve capital.
All of that bodes well for supply. We are certainly not going to see an
increase in gold supply.
This
will not only impact supply, but it will also make for better
businesses. Companies will be more focused on execution and that
execution will give investors leverage to the gold price. This is all
part of a phase where the industry is evolving.
Between
now and early March, companies will have already made their plans and
be pulling back because budgets are being set right now. When gold
turns, you want to be positioned in quality companies because of the
leverage you will get from them that won’t get from an ETF.”
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