Tuesday, January 10, 2006

John Embry of Sprott Asset Management

There is an excellent interview with John Embry, Sprott Asset Management's chief investment strategist, on a Canadian television show today called "Market Call with Jim O'Connell".

John Embry, is an industry expert in gold, he has researched the gold sector for over thirty years and has accumulated extensive experience as a portfolio manager since 1963. Sprott Asset Management now manages over half a Billion Dollars of investor funds.

When asked at what stage of the gold bull market we are in, John Embry said "we are in the early stages of the 2nd phase of a 3 phase long life bull market, and this one I think you are going to see people will finally realise why gold is a good idea."

Why is the gold price going up?

When asked why is the gold price going up? Embry said " The biggest driver which you don't see in the press at all, are the short positions. A lot of people who have been on the wrong side of the market that have been going along with the cartel are getting real uncomfortable... and starting to unwind some positions, that is against an excellent macroeconomic and geopolitical backdrop, there is a lot of things going wrong in the world that are beneficial for gold."

Bill Murphy of the Gold Anti Trust Action Committee (GATA), says the gold cartel is short as much as 10,000 tonnes of gold! Murphy believes they are panicing to cover those short positions at the moment, and that is why the gold price is taking off.

The gold cartel is losing control of the gold price.

Embry believes the achilles heel to the manipulation of the gold price by the gold cartel is their shortage of physical gold.

Embry says "The central banks have spewed a lot of gold into the market over the last 15 years, they do not have nearly what people think they have and now you have a lot of other central banks particularly China and Russia looking to add to their holdings."

Embry doesn't believe that western central bank selling is going to be a driver for gold in the next few years, simply because he believes they are running short of gold to sell into the market to suppress the gold price.

Israel, Iran and the Gold Price

John Embry was asked what would happen to the gold price if Israel decided to take out Iran's nuclear facilities. Embry said "In the old days when the gold cartel was in full bloom they would squash the gold price in this type of event just to show that gold had no impact on anything but now they are getting short on physical gold they would be overrun."

Embray predicts $100 moves in the gold price are conceivable at some point in the future. Embry says we will see moves of $20 and $30 in the gold price as the gold bull market picks up steam.

When will gold hit $600?
Embry says he expects the gold price to pass $600 in the next few months and $1000 in the next few years. Although he doesn't rule out the possibility of Bill Murhpy's prediction of $5000.

You can find John Embry's Interview at the 12:30 p.m. segment of the Tuesday ROB-TV archive here:


You will need to watch this interview with John Embry in the next 7 days, as it will be removed from the archive at ROB-TV after that.

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