Gold & Silver Pullback, Declining Comex Inventories & Syria
I would note that last week the Comex inventories saw another decline, and as we get closer to every expiry this will provide an underpinning to the market.
At the same time, you also have some of the silver producers where there is talk of $25 an ounce cost of production. The reality is these companies are like supertankers -- they have to move around, but it is also important to keep in mind that we have seen a dramatic decline in grade over the past 5 years.
On the heels of continued consolidation in the gold and silver markets, today King World News interviewed Canadian legend John Ing, who has been in the business for 43 years. He spoke with KWN about declining COMEX inventories, the pullback we are seeing in the gold and silver markets, and what investors should expect in the future. Below is what the legendary 43 year market veteran, John Ing, had to say in his interview.
Ing: “Gold has been having a difficult time holding the key $1,400 level. But the absence of traders and investors, because of the Jewish holiday Rosh Hashanah, means that any trading is going to be very volatile in a quiet period such as the one we are seeing right now.
“Also, because of the lack of news, which is expected because of the G-20 meeting on Syria, this has meant that any of the hedge players retreated to the sidelines to await further developments.
Gold recently ran up to that $1,425 resistance area, but gold is also now reaching support areas on this pullback. Gold essentially ran up more than $200 in a very short period of time and the reality is that it needed to consolidate those gains. But my expectation is that this is just the pause that refreshes the upside move in gold.
I would also note it’s interesting that the mining shares have been trading sideways. The reality is that the mining stocks will follow the price of bullion. Some of the companies are going to have to report good quarters to show investors that they are on the right track. Barrick Gold has come under pressure once again because of a hedge fund pointing out, and rightly so, that they don’t have technical people on their board. They also pointed out the need for Barrick to get rid of their high cost mines.