- Jim Sinclair – Shorts Are About To Get Mauled In The Gold Market!
Today legendary trader Jim Sinclair told King World News that when it comes to gold, “… the crowd has an opinion, the crowd is bearish, and the crowd is never right.” Sinclair also stated that the crowded short position in the gold market is going to get mauled.
Eric King: “Jim, the situation that’s going on right now in the gold sector, it really reminds me of when Warren Buffett purchased a large stake in the Washington Post in the 1970s. The press ended up going to him after about 18 months because he was down 40% on his investment in the Post, and they asked him, ‘What are you going to do now?’ If I remember correctly Buffett said, ‘Nothing.’ It turned out to be one of his greatest investments of his life. Buffett’s gain at one point in the Washington Post was a staggering 15,336%. I wanted to ask you today how Buffett’s experience relates to what is happening in the gold market?”
Sinclair: “It’s a mirror image. Buffett knew what the true value was. He knew what the long-term prospects were, and he knew without a doubt that he was going to do extremely well on that investment. This is especially true of a man who is holding a long position and says something like that in response to a question from the press. And of course Buffett knew what he was talking about….
“Let me say this, eventually the gold companies will become like utilities as the gold price is moving towards its final destination. These quality gold companies will pay big dividends the same way the utilities have always paid big dividends. If the company has the gold, the mineable ounces, and the ability to finance, then what are you worried about? It’s going to be fine.”
Eric King: “Jim, you called for this changing nature of the way this gold market is now trading, and Friday’s action surprised a lot of people, but not you. The reason you were not at all surprised by Friday’s rally in gold is you had been noting the changing nature of this market. What about gold going forward?”