Question 1-Do you think that gold bullion has bottomed? And what about the gold stocks?

Answer…Our analysis suggested last July that we were seeing the bottom for gold and many of the gold stocks. Our friends, such as Ray Langevin and Claude Lemire said that in their view, it was a bottoming area. At the same time, Pierre Lassonde, the former CEO of Newmont and one of the most respected mining executives in the world said in an interview that he believed that bullion and many gold stocks had bottomed. He had said last June, that $1200, plus or minus $30 would give us a bottom. Incredibly, he missed by $2.

Yes, we do think that gold bullion and the majority of gold stocks have bottomed. We think that the market for gold stocks may be the opportunity of a lifetime. 

Question 2-Where are the 350 tons of Gold that the New York Federal Reserve Bank held for Germany for decades for safekeeping that Germany rightfully wants back?

Answer…The answer is that Germany’s gold is not in the Federal Reserve’s vault in downtown Manhattan and the Federal Reserve will not tell the public or perhaps even the German government where it is. The Germans had originally requested to inspect their gold and the Fed refused to let them see it. Quite bizarre!

In our opinion, it has either been sold or lent out with the assumption that they could easily get it back. Now the Fed cannot get it back easily and if the Fed is forced to get it back, it would cause a huge price rise. Safekeeping eh? There is much more to this story and recently there is a great deal of interest in the German media about this. People in Germany are infuriated-they should be!

Question 3-What is your opinion about China’s purchases during the price weakness in gold?

Answer…China bought approximately half of the worlds’ gold production last year and at the same time, as the world’s largest gold producer, they did not export any of their domestic production.  They are taking advantage of the price weakness by accumulating gold while it is “on sale.” To the Chinese, it is an exceptional opportunity to buy. They have been very prudent and intelligent buyers.

Of interest, I was told that recently some Chinese mines have a cost of production at about $1800 an ounce and yet, they are continuing to produce at those mines. The reason is that the governing powers in China believe that the future price of gold will be substantially higher and in the grand scheme of things, even $1800 may be cheap. We agree!

Question 4-Do you believe that fundamentally, not technically, not “manipulatedly”, the price of gold has bottomed?

Answer…Yes, I have been saying for some time that gold bullion from too many producing mining companies is selling below their “all in cost” of production. This is very important! When this occurs, the supply can diminish as some operations are cut. If consistent demand continues as it obviously has, the price rises. It is not an indicator that can offer short term timing advice but it causes some companies to shut down production which has a limiting effect on supply.

 Can they still manipulate it down in price again? Yes, as we are not dealing with honest and trustworthy people. They want to keep the printing presses running to the tune of let’s say $5,000,000,000 per day ($5 Billion) which happens to be the daily deficit that the United States Government is running.

Question 5-Do you think that the price of gold has been manipulated down?

Answer…Yes, it is obvious that the price has been manipulated down by certain suspects such as the Fed, certain major brokerage houses and others that are short gold. A reason is that bonds cannot be sold at the current low interest rates if gold is running up; and when gold is in a bull market, usually the industrial stock market is in a bear market. Thus, the brokerage houses do not want to see bull markets in gold and gold stocks; it tends to interfere with brokerage house profits. If they are not profitable, they may ask for a bailout….again!

Question 6-What are the Central Banks doing in the gold market?

Answer…Generally; they are buying very discreetly whatever bullion is available trying to not cause the price to rise so they do not have to “pay up.” Gold bullion is leaving the west and going into China. Central Banks, in my opinion are not manipulating the gold market, rather, they are participating in the gold market. 

Question 7- In December and January, some of the major Wall Street brokerage houses have been forecasting gold to move down in 2014. What do you think about their forecasts?

Answer…Judging by their track records which are largely pathetic, we feel that it may be the best indication that gold and mining stocks are about to have a very good year in 2014.

Question 8-Can you give us an example of “manipulation” in the gold market?

Answer…On February 6,  3225 Gold Contracts were sold at 8:50 AM; it stopped the price of gold from rising up as was the plan in our opinion. Gold dropped $15 AND WHILE THE AVERAGE NUMBER OF CONTRACTS PER MINUTE ON THE COMEX IS ABOUT 90 PER MINUTE, THIS SALE WAS OVER 40 TIMES THAT AVERAGE PER MINUTE. The purpose of the transaction was to hammer gold bullion down.  THIS IS A REGULAR OCCURRENCE DESIGNED TO KEEP THE PRICE OF GOLD DOWN. THAT IS THE PLAN AND THE PLOT. THE QUESTION IS HOW LONG CAN IT GO ON. 

  Thank you, K.C.