This week, The Gold Report spoke with John Embry, a Chief Investment Strategist for Sprott Asset Management and gold expert. Embry predicts four-digit gold by January 2009. He blames the recent fall of gold on “violent intervention by the paper players”.
Embry predicts, in turn, that there will be a “violent reaction in the gold price soon”, due to the fact that it will spring back. Embry also predicts mergers and acquisitions of smaller mining companies that cannot afford the rising costs at this time, stating that many mines need gold to be at $1200 an ounce in order to turn a profit. The mining companies currently doing well have a significant cash flow.
Lots of debt – stuck creating more to bail the situation out – deflation. Embry also cites the 1930s when the best performing commodities were gold stocks. He recommends a core holding of bullion.
Embry went on to say, “It’s always best to talk when things are at their worst because I think that’s when the opportunity is the greatest.”
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