Man Who Predicted Surge In Gold Says Rally Just Beginning
October 22, 2013
On the heels of the US Dollar Index tumbling down near the 79 level, and the gold and silver markets on the move, today the man who predicted this surge in gold ahead of time sent King World News an absolutely incredible snapshot of the big picture for the gold and silver markets, along with 2 extraordinary charts. KWN was given exclusive distribution rights to this outstanding piece by superstar John Hathaway of Tocqueville Asset Management L.P.. John is without question one of the most respected institutional minds in the gold world today, and his fund was awarded a coveted 5-star rating.
By John Hathaway, Tocqueville Asset Management L.P.
The Rally In Gold Is Just Beginning
October 22 (King World News)
Gold and gold mining shares spent most of the third quarter backing and filling without establishing any clear direction. Gold increased 7.6% during the quarter, closing at $1328.6/oz, but down 20.7% year-to- date. The XAU Index of gold and silver stocks rose 4.1% during the quarter, and was down 42.5% on a year- to-date basis.
The rationale for investing in the precious metals sector remains compelling, in our opinion. That rationale rests on two fundamental pillars. Firstly, world-wide fiscal and monetary policies have been directly and indirectly subsidizing asset values, which makes financial assets especially vulnerable to permanent impairment when supports inevitably end. Secondly, continuous and unconstrained monetary emissions are fraught with unintended consequences, which have historically included debasement of paper currencies via inflation or devaluation and sovereign debt crises. These risks can imperil all financial assets both in terms of their market prices and solvency.
It is astonishing to us that the Federal Reserve and its radical monetary policy retain even a sliver of credibility and trust within the financial markets. Third quarter commentary by various prominent Fed officials conveyed no consensus for attaining their prime objective of slowing the rate of asset purchases and thereafter reducing the size of the Fed balance sheet. The Fed decision not to taper following the FOMC meeting in September momentarily surprised the markets, leading to a brief but sharp rally in gold and related equities.