With continued uncertainty in the gold and silver markets, today John Hathaway told King World News that the physical market for gold is on fire. Hathaway also told KWN that large numbers of orders for physical gold are experiencing delays. Hathaway, of Tocqueville Asset Management L.P., is one of the most respected institutional minds in the world today regarding gold, and his fund was awarded a coveted 5-star rating.
Eric King: John, what are you hearing about the physical market for gold?
Hathaway: Well, it’s just gangbusters. You hear about shortages of coins. Sometimes that can be attributable to the mints not having enough equipment. Bars, the same thing. I read recently that more than half of the gold which has been ordered has been on a delayed delivery of some sort.
Everything I get confirms the activity is overwhelmingly on the buy side….
So this pullback has not at all disheartened people who want to own more gold. In fact they are just looking at it as if it was a ‘blue light special,’ and they are just standing in line to buy.
Sometimes you have to give the average citizen some credit in terms of common sense. They can look at what’s going on and say, ‘This doesn’t make sense. Money printing can’t be good over the longer-term.’ They don’t need CNBC or Bloomberg to tell them to go out and buy it.
They are thinking for themselves. I mean if anything the media is so dead set against gold right now, the fact that the public buying remains so strong, to me, is very, very significant … and if you look at the traders’ commitments, they are extremely bullish. The smart money is on the buy side, and the specs are very heavily on the short side.
Eric King: John, I know you’ve been watching the US dollar closely, your thoughts on the dollar?
Hathaway: Well, you know it’s starting to show some weakness, I’m talking about the trade-weighted dollar. It’s probably still early in the game, but it’s beginning to look as if it wants to punch lower.
I notice when you look at the traders’ commitments and the sentiment, the bulls are just overwhelmingly there (long the US dollar). So I think it is set up for a decent correction … What that would mean is that the QE the Fed is practicing now will be seen by the markets to be either potentially greater as the Fed said at this last meeting, or that they may extend it for much longer than anyone realizes. But I think a weaker dollar will certainly be good for gold.
Source : KWN