Legend Says Despite Recent Weakness, Gold Price Set To Soar

Today a legend who was recently asked by the Chinese government to give a speech to government officials in China told King World News that despite the recent weakness, the gold market may be set up for a massive surge to the upside.  John Ing, who has been in the business for 43 years, also spoke about what catalysts will send the gold price soaring as well as a big surprise for the mining sector.

Ing:  “It’s the classic tug-of-war between the physical market and the paper market.  And I believe, Eric, that the dramatic turnaround in gold about ten days ago was a classic short squeeze….

“When the Swiss vote was rejected, as many of us expected, Hong Kong and some of the hedge funds sold short on that Sunday night (Monday morning Asian trading).  Well, Monday they came in and there was a scramble for physical gold.  That caused the shorts to be on the wrong side and thus we had a major bottom for gold.

The action to date in the face of the oil price collapsing to a 5-year low is raising the thought of, ‘Here we go again, even as there is stress in the financial markets.’  A lot of our banks are big derivative players.  They have been perennially on the wrong side of the market and they are definitely on the wrong side in the collapse in oil.

So the oil shock and credit contagion as well as the currency war that we’ve talked about are all contributing to the positive action in gold.  $1,260 is a level that I am watching because if gold can break above that level before Christmas, my anticipation is that we will start to see moves of more than $100 in the price of gold.

Also, the beneficial aspect of the lower oil price for the gold industry is enormous.  Oil is the number one input cost in the mining sector and the price has collapsed.  The latest quarterly earnings from the mining sector showed a lot of them got their ‘all-in’ costs under control.  Well, the major part of those costs are energy related.

What is now happening is the crash in oil prices is going to have a tremendously beneficial impact on some of these gold producers.  Even for those who have hedged oil costs, they will still see the positive impact in 2015.  Regardless, this will be a huge savings for the gold industry.

For example, Barrick Gold spent something like $1.5 billion for energy alone last year.  Well, in 2010 that number was around $1 billion.  So the lower energy costs will amount to a massive savings for the producers across the board.  This is something that the mining industry has not talked about but we will start seeing the positive impact of this in the first quarter.  This bodes extremely well for the mining sector, which has already been tightening their belts.  So this could not come at a better time for the producers.”

Eric King:  “John, Andrew Maguire told KWN there are serious sovereign bidders in the gold market at the $1,208 level.  He also said there is tightness in the physical gold market that exceeds what we witnessed in 2001 and 2008, which he believes will make it very difficult to drive the gold market lower.”

Ing:  “Well, we’ve had repeated tests in the gold market and each downside test seems to hold.  Gold appears to be weak in the overnight trading in Asia, but then it picks up strength in the early morning trading in the West.  Usually it’s quite the reverse.

So when I look at the trading action, gold is breaking out of the trading range it has been confined to.  This is an extremely positive development.  I also think the strength in the U.S. dollar is all an illusion and it is now poised to break down.  Once that begins to unfold the Americans will once again join the global currency war and that is when we will really start to see some dramatic moves to the upside in the gold price.”
http://kingworldnews.com/legend-says-despite-recent-weakness-gold-price-set-to-soar/