Sprott – Default Coming As 850 Tons Of Gold Supply Vanished
February 11, 2013
Today billionaire Eric Sprott told King World News that the massive plunge in gold scrap recycling may be removing as much as a staggering 850 tons of gold from world supplies each year. Sprott, who is Chairman of Sprott Asset Management, also warned of a coming default on the COMEX, “And when it (the default) happens, there will be a substantial move in the price of gold (and silver). We’ll make up for these last two years in no time.”
Eric King: “KWN has been receiving information from refiners for quite some time, and this was from one of the largest metals refiners in the world, “The secondary market, which is scrap, business is down almost 50% year over year, and the previous year was already a down year. The only supply now is coming from the miners. This applies to both gold and silver. Gold and silver bar and coin demand is very strong and the supply has essentially dried up.”
Sprott: “It’s interesting, Eric, that the data on recycled gold is woefully lacking. That’s what I hear from my discussion with people, and Johnson Matthey in their six month report suggested that their recycling was down. Your evidence is meaningful. That’s what I hear.
Because the price has been static or down, essentially, for 2 years, the willingness to trade in gold rings and otherwise recycle some jewelry has diminished here. If it (recycling) is down 50%, I think recycling adds something like 1,700 tons to the gold supply above mine supply, well, that would imply a reduction of (a staggering) 850 tons (of gold supply)….